Multiple Choice
Suppose that the price elasticity of demand for a product is -1 and that the price elasticity of supply is +1.Assume also that the income elasticity of demand is +2.Then an increase in income of 10% will raise equilibrium price by
A) 10%.
B) 5%.
C) 20%.
D) an annual amount that cannot be determined.
Correct Answer:
Verified
Correct Answer:
Verified
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