Assume that in Country A, the average annual income of a typical person is $180,000. Annual consumption of black caviar is estimated at 4.5 kilos. The income elasticity of demand for black caviar is 1.25. What would average annual income have to be for consumption of black caviar to rise to 7.5 kilos? Use the midpoint method in your calculations.

Q: Assume that in Country A, the average annual income of a typical person is $300,000. The annual…

A: The price elasticity of demand measures the responsiveness of quantity demanded to a change in…

Q: Assume that in Country A, the average annual income of a typical person is $180,000. Annual…

A: The mid point formula of income elasticity is given as : e = ∆Q / ∆ M × M2 + M1 / Q2 + Q1

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A: Elasticity of demand depicts how much consumer responds with the change in the price level.

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A: Income elasticity of demand depicts how much consumer responds with the change in his income.

Q: income elasticity of demand

A: The % in Q change to % in Income (I) change calculates ei or income elasticity. The formula is given…

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A: Income elasticity of demand- It refers to Percentage change in demand due to percentage change in…

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