If the income elasticity for lobster is 0.4, a 40% increase in income will lead to a:* 10% drop in demand for lobster. 16% increase in demand for lobster. 20% increase in demand for lobster. 4% increase in demand for lobster.
If the income elasticity for lobster is 0.4, a 40% increase in income will lead to a:*
10% drop in
16% increase in demand for lobster.
20% increase in demand for lobster.
4% increase in demand for lobster.
You are the manager of a supermarket, and you know that the income elasticity of peanut butter is exactly –0.7. Due to the economic recession, you expect incomes to drop by 15% next year. How should you adjust your purchase of peanut butter?*
Buy 10.5% more peanut butter.
Buy 2.14% more peanut butter.
Buy 6.2% less peanut butter.
Buy 9.8% less peanut butter.
When total revenue of the seller decreased caused by an increase in price, the demand for the product is said to be _______________.*
Inelastic
unit elastic
elastic
perfectly elastic
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
