O-LevelEconomicsThe allocation of resources2281/11 · May/June 2012 · Q51 Mark

A large shop selling clothes opened in a town. Its prices were much cheaper than other shops selling similar items. As a result many more customers came to the area. They also visited restaurants near the shop. The restaurants reported a 10% increase in sales. What economic concept does the above statement best illustrate?

Aexternal benefit

Binelastic demand

Cmarket failure

Dperfect competition

✓ Correct answer

A: external benefit

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2012 Paper 1 Variant 1, question 5.

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