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Economics (AS & A Level) · May / June 2021 · Paper 11 · Question 6

9708The interaction of demand and supply

When will it not be possible to use price as a rationing mechanism?

  1. Awhen a good has a number of close substitutes
  2. Bwhen a good is an inferior good
  3. Cwhen the demand for a good is perfectly inelastic
  4. Dwhen the quantity of a good is in fixed supply

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Correct answer: C. when the demand for a good is perfectly inelastic

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