Economics (AS & A Level) · May / June 2022 · Paper 14 · Question 13

In the diagram, D1 and S1 represent the demand for and supply of luxury watches. Equilibrium is initially at point X. The cost of raw materials for manufacturing watches rises. At the same time, the incomes of the rich increase. Which point on the diagram is most likely to represent the new equilibrium?

1. AA
2. BB
3. CC
4. DD

As printed in the paper