A-LevelEconomicsPrice ElasticityMay/June 2022Paper 1 Q101 Mark
The cross-elasticity of demand of good S with respect to the price of good P is +1.5. The cross-elasticity of demand of good S with respect to the price of good R is –1.5. The cross-elasticity of demand of good P with respect to the price of good R is –1.5. What can be concluded about goods P, R and S?
AS and P are complements; P and R are substitutes.
BS and P are complements; R is an inferior good.
CS and P are substitutes; P and R are complements.
DS and P are substitutes; R is an inferior good.
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The correct answer is C. This question tests the candidate's understanding of price elasticity within the Economicssyllabus. The examiner's mark scheme requires...
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