A-level Paper 1, June 2025Markets and Business Behaviour
A-level Paper 1, June 2025, Q2(b)
The cross elasticity of demand for petrol cars with respect to the price of diesel cars is estimated to be +0.64. Which one of the following is the most likely impact if the price of diesel cars falls by 10%?
Multiple choice1 mark
AThe price of petrol cars falls by 6.4%
BThe price of petrol cars rises by 64%
CThe quantity demanded of petrol cars falls by 6.4%
DThe quantity demanded of petrol cars rises by 64%