Suppose You Manage a Seven Eleven and Are in Charge

Multiple Choice

Suppose you manage a Seven Eleven and are in charge of ordering products, while the home office sets the prices. In your area, the income elasticity of demand for beef jerky 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 _____ beef jerky.

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