DP Economics
Question 18M.3.HL.TZ0.1e
| Date | May 2018 | Marks available | [Maximum mark: 2] | Reference code | 18M.3.HL.TZ0.1e |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | e | Adapted from | N/A |
e.
[Maximum mark: 2]
18M.3.HL.TZ0.1e
Note that widgets and pidgets are imaginary products.
In the country of Burbia, the demand and supply of widgets are given by the functions
Qd = 249 − 4P
Qs = 150 + 14P
where Qd is the quantity demanded per month, Qs is the quantity supplied per month and P is the price per widget in dollars ($).
(e)
Widgets and Pidgets have negative cross price elasticity of demand (XED).
Explain how the demand function for Widgets, Qd = 249 − 4P, is likely to change as a result of an increase in the price of Pidgets.
[2]
Markscheme
