AS Paper 1, June 2019Introduction to Markets and Market Failure
AS Paper 1, June 2019, Q5(b)
Explain one reason why the income elasticity of demand is significant to the producer of Freddos.
Short answerExplain3 marks
Context
2015 2017 Average weekly pocket money for children £7 £8.75 aged under 10 years In the UK, Freddo is a popular chocolate snack bought by children who are under 10 years old. Freddo’s income elasticity of demand is estimated to be –0.1.