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If the Income Elasticity of Demand for a Good Is

Question 103

Multiple Choice

If the income elasticity of demand for a good is 1.25, a 10 percent increase in income results in


A) a 12.5 percent decrease in the quantity demanded.
B) a 125 percent increase in the quantity demanded.
C) a 12.5 percent increase in the quantity demanded.
D) a decrease in quantity demanded.
E) not enough information to answer this question.

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