Table 1 Data relating to incomes and the demand for beer: 2018–24
1 A tax on junk food of £0.30 on a typical burger costing £2.50 is estimated to reduce demand by 3.5%. Calculate the price elasticity of demand for this item of junk food to one decimal place. (2 marks)
2 Using Table 1, to what extent do the data show that the demand for beer is likely to be a luxury good. (4 marks)
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