ECONOMICS
MARKETS AND PRICES
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Question
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An increase in the price of petrol will often result in consumers economising in their use of fuel by reducing the number of journeys they make in their cars. This
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is because petrol and car journeys are in joint supply
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shows that there is a positive cross elasticity of demand between the price of petrol and the demand for car journeys
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illustrates the operation of the rationing function of the price mechanism
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Is because the price elasticity of demand for petrol is positive
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Explanation:
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