DINKs are households with "double income, no kids", and such households are invading your neighbourhood. You decide to take advantage of this influx by starting a gourmet take-away food store. Assume that these DINKs in your neighbourhood are your only potential customers. You know that the price elasticity of demand for your food from DINKs is 0.5, and their income elasticity of demand is 1.5. From the standpoint of the quantity that you sell, explain which of the following changes would concern you most. First, the number of DINKs in your neighbourhood falls by 10 percent. Second, the average income of DINKs falls by 5 percent.
DINKs are households with "double income, no kids", and such households are invading your neighbourhood. You decide to take advantage of this influx by starting a gourmet take-away food store. Assume that these DINKs in your neighbourhood are your only potential customers. You know that the price elasticity of demand for your food from DINKs is 0.5, and their income elasticity of demand is 1.5. From the standpoint of the quantity that you sell, explain which of the following changes would concern you most. First, the number of DINKs in your neighbourhood falls by 10 percent. Second, the average income of DINKs falls by 5 percent.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....
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DINKs are households with "double income, no kids", and such households are invading your neighbourhood. You decide to take advantage of this influx by starting a gourmet take-away food store. Assume that these DINKs in your neighbourhood are your only potential customers.
You know that the
From the standpoint of the quantity that you sell, explain which of the following changes would concern you most.
First, the number of DINKs in your neighbourhood falls by 10 percent.
Second, the average income of DINKs falls by 5 percent.
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