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Rus_ich [418]
3 years ago
9

10 percent decrease in consumer incomes leads to a 20 percent decrease in the quantity demanded of good D. Instructions: Round y

our answer to one decimal place. If you are entering a negative number be sure to include a negative sign (-) in front of that number. The income elasticity of this good is: . This good can best be described as (Click to select) .
Business
1 answer:
Katyanochek1 [597]3 years ago
4 0

Answer:

Income elasticity = 2

Normal good

Explanation:

Below is the given values:

Percentage decrease in consumers income = 10%

Percentage decrease in quantity demanded = 20%

Use the below formula to find the income elasticity:

Income elasticity = % change in quantity demanded / % in income

Income elasticity = -20/-10

Income elasticity = 2

Since the elasticity is 2 that means good is normal good.

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