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Economics (AS & A Level) · Oct / Nov 2025 · Paper 12 · Question 9

9708Price elasticity, income elasticity and cross elasticity of demand

Public transport in an economy has an income elasticity of demand of –0.36. What does this mean about public transport?

  1. AIt is an inferior good.
  2. BIt is a necessity.
  3. CIt is a normal good.
  4. DIt has close substitutes.

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Correct answer: A. It is an inferior good.

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