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 his information, which of the following statements are true? Select one or more: O a. A 10% rise in consumer income will lead to a 1.5% rise in sales of its ready meals. O b. A 5% rise in the price of its product will lead to a 12.5% fall in sales of its ready meals. O c. A 4% fall in the price of its product will lead to a 10% fall in sales of its ready meals. O 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 his information, which of the following statements are true? Select one or more: O a. A 10% rise in consumer income will lead to a 1.5% rise in sales of its ready meals. O b. A 5% rise in the price of its product will lead to a 12.5% fall in sales of its ready meals. O c. A 4% fall in the price of its product will lead to a 10% fall in sales of its ready meals. O d. A 6% rise in consumer income will lead to a 9.0% rise in sales of its ready meals.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter5: Elasticity
Section: Chapter Questions
Problem 6SCQ: Suppose you are in change of sales at a pharmaceutical company, and your firm has a new drug that...
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