A-LevelEconomicsThe price system and the microeconomy9708/12 · Oct/Nov 2016 · Q121 Mark

When will it not be possible to use price as a rationing mechanism?

Awhen a good has a number of close substitutes

Bwhen a good is an inferior good

Cwhen the demand for a good is infinitely inelastic

Dwhen the quantity of a good is in fixed supply

✓ Correct answer

C: when the demand for a good is infinitely inelastic

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Topic: The price system and the microeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2016 Paper 1 Variant 2, question 12.

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