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For US Consumers, the Income Elasticity of Demand for Fruit Juice

Question 117

Multiple Choice

For U.S. consumers, the income elasticity of demand for fruit juice is 1.1. If the economy enters a recession next year and consumer income declines by 2.5%, what is the expected change in the quantity of fruit juice demanded next year?


A) -2.75%
B) +2.75%
C) -27.5%
D) +27.5%

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