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Economics (AS & A Level) · Oct / Nov 2021 · Paper 13 · Question 11

9708The interaction of demand and supply

The diagram shows the demand for and supply of a normal good. E1 is the initial equilibrium position. Which changes could result in a new equilibrium E2?

  1. Aa decrease in both the demand for and the supply of the good
  2. Ban increase in both the demand for and the supply of the good
  3. Can increase in consumer incomes, and a decrease in the supply of the good
  4. Dan increase in the price of a complement to the good, and an increase in the supply of the good

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Correct answer: C. an increase in consumer incomes, and a decrease in the supply of the good

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