A firm selling ready meals discovers that the price elasticity of its product is -2.5 and the income elasticity of its product is 1.5. Given this information, which of the following statements are true? Select one or more: a. A 10% rise in consumer income will lead to a 1.5% rise in sales of its ready meals. b. A 5% rise in the price of its product will lead to a 12.5% fall in sales of its ready meals. c. A 4% fall in the price of its product will lead to a 10% fall in sales of its ready meals. d. A 6% rise in consumer income will lead to a 9.0% rise in sales of its ready meals.
A firm selling ready meals discovers that the price elasticity of its product is -2.5 and the income elasticity of its product is 1.5. Given this information, which of the following statements are true? Select one or more: a. A 10% rise in consumer income will lead to a 1.5% rise in sales of its ready meals. b. A 5% rise in the price of its product will lead to a 12.5% fall in sales of its ready meals. c. A 4% fall in the price of its product will lead to a 10% fall in sales of its ready meals. d. A 6% rise in consumer income will lead to a 9.0% rise in sales of its ready meals.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 13PAE
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A firm selling ready meals discovers that the
Select one or more:
a. A 10% rise in consumer income will lead to a 1.5% rise in sales of its ready meals.
b. A 5% rise in the price of its product will lead to a 12.5% fall in sales of its ready meals.
c. A 4% fall in the price of its product will lead to a 10% fall in sales of its ready meals.
d. A 6% rise in consumer income will lead to a 9.0% rise in sales of its ready meals.
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