O-LevelEconomicsThe allocation of resources2281/12 · Oct/Nov 2015 · Q71 Mark

Air travel and rail travel are substitute forms of transport. The diagram shows the effect of new technology on the market for air travel. What would be the most likely effect on the market for rail transport?

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

Adecrease in demand for rail transport

Ban increase in the price of rail tickets

Can increase in supply of rail transport

Dan increase in the total income of rail companies

✓ Correct answer

A: decrease in demand for rail transport

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2015 Paper 1 Variant 2, question 7.

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