ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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holidays in the UK are an inferior good while holidays abroad are a normal good.
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the demand for holidays abroad is income elastic while the demand for holidays in the UK is income inelastic.
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here is a negative cross price elasticity of demand between holidays abroad and holidays in the UK.
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holidays abroad have a high price elasticity of demand while holidays in the UK have a low price elasticity of demand.
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Detailed explanation-1: -The law of demand states that when the price of a product goes up, the quantity demanded will go down – and vice versa.
Detailed explanation-2: -Which of the following is most likely to occur when a competitive market adjusts from one equilibrium to another? An increase in demand will cause the equilibrium price, equilibrium quantity, and producer surplus to increase.
Detailed explanation-3: -An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase.
Detailed explanation-4: -The law of supply and demand is the theory that prices are determined by the relationship between supply and demand. If the supply of a good or service outstrips the demand for it, prices will fall. If demand exceeds supply, prices will rise.