AS Paper 1, June 2024Introduction to Markets and Market Failure
AS Paper 1, June 2024, Q5(c)
Which one of the following is most likely to be a determinant of price elasticity of demand for the Model 3 electric vehicle?
Multiple choice1 mark
Context
Chief Executive Elon Musk said “affordability” was the biggest barrier to Tesla reaching a far larger market. Before recent price cuts for its electric vehicles, he said, “We weren’t sure about what the price elasticity of demand was for Tesla. We found that even small changes in price have a big impact on demand.”
AAvailability of substitute electric vehicles
BChange in population size
CIncrease in the cost of steel
DNumber of unsold Model 3 electric vehicles