Question
I)Draw a supply and demand diagram to illustrate the effect of an increase in income on equilibrium price and quantity traded for an inferior good.
I)Draw a supply and demand diagram to illustrate the effect of an increase
in income on equilibrium price and quantity traded for an inferior good. [5 marks]
(ii)Discuss how knowledge of price elasticity and income elasticity might be
of practical use to a firm dealing in the sales of mobile phones in deciding
on its revenue strategy. [10 marks]
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Understanding The Law
Authors: Donald L Carper, John A McKinsey, Bill W West
5th Edition
0324375123, 9780324375121
