A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2019 · Q121 Mark

The cross elasticity of demand between two products, X and Y, is negative. What would be the immediate effect of a rise in the price of product Y?

AQuantity demanded of product X will fall.

BSupply of product X will rise.

CThe cross elasticity of demand will rise.

DThe price of product X will rise.

✓ Correct answer

A: Quantity demanded of product X will fall.

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Topic: Government microeconomic intervention, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2019 Paper 1 Variant 2, question 12.

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