Economics (AS & A Level) · Feb / March 2024 · Paper 12 · Question 7
9708Price elasticity, income elasticity and cross elasticity of demand
The price elasticity of demand for good X is –2.4, its income elasticity of demand is –0.4 and the cross elasticity of demand for good X with respect to good Y is +0.8. What is the correct description of good X?
- Ainferior good, price-elastic demand and substitute for good Y
- Binferior good, price-inelastic demand and complement to good Y
- Cnormal good, price-elastic demand and complement to good Y
- Dnormal good, price-inelastic demand and substitute for good Y
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Correct answer: A. inferior good, price-elastic demand and substitute for good Y
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