Answered: income elasticity of demand

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Economics

income elasticity of demand

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 7SQP: Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less...

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Question

Assume that in Country A, the average annual income of a typical person is $190,000. Annual consumption of black caviar is estimated at 1.7 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 2.3 kilos?

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