Economics 9708 · AS & A Level · Price elasticity of demand

Price elasticity of demand — practice question

Which combination of income elasticity of demand and price elasticity of demand is most likely to account for a firm being able to earn higher profits in specialised luxury product markets?

  • Aincome elasticity of demand: high; price elasticity of demand: high
  • Bincome elasticity of demand: high; price elasticity of demand: low
  • Cincome elasticity of demand: low; price elasticity of demand: high
  • Dincome elasticity of demand: low; price elasticity of demand: low

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