Multiple Choice
You are the owner of a boutique clothing store and estimate the price elasticity of demand for your clothing to be 2.50 and the income elasticity of demand for your clothing to be 1.55. If you increase the price of your clothing by 10 percent, which of the following should you expect to occur?
A) The quantity demanded of your clothing will increase by 25 percent.
B) The quantity demanded of your clothing will increase by 15.5 percent.
C) The quantity demanded of your clothing will decrease by 15.5 percent.
D) The quantity demanded of your clothing will decrease by 25 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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