Suppose You Manage a Convenience Mart and Are in Charge

Multiple Choice

Suppose you manage a convenience mart and are in charge of ordering products,but the home office sets the prices.In your area,the income elasticity of demand for peanut butter is -0.5.Because of local factory closings,you expect local incomes to decrease by 20% on average in the next month.As a result,you should stock _____ peanut butter.

A) 20% more
B) 5% more
C) 10% more
D) 10% less