Multiple Choice
What does it tell you if the income elasticity for your product is -0.5?
A) The product is inferior and an increase in income by 10% reduces demand by 5%.
B) The product is inferior and an increase in income by 10% increases demand by 50%.
C) The product is normal and an increase in income by 10% reduces demand by 5%.
D) The product is normal and an increase in income by 10% increases demand by 50%.
Correct Answer:
Verified
Correct Answer:
Verified
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