2. Suppose a 10% decrease in Income of the consumers, has resulted in a 30% increase in the demand for a product (say, product X). Evaluate the Income elasticity of Demand. Is X a normal good or an inferior good? Why?

2. Suppose a 10% decrease in Income of the consumers, has resulted in a 30% increase in the demand for a product (say, product X). Evaluate the Income elasticity of Demand. Is X a normal good or an inferior good? Why?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...

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2. Suppose a 10% decrease in Income of the consumers, has resulted in a 30% increase in the
demand for a product (say, product X). Evaluate the Income elasticity of Demand. Is X a
normal good or an inferior good? Why?

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