Question: Jane spent all her income on hot dogs and caviar
Jane spent all her income on hot dogs and caviar. Her demand curve for caviar was inelastic at all prices for caviar. Unfortunately, an accident at a nuclear power plant caused the supply of caviar to fall and the price to rise. What happened to Jane’s consumption of hot dogs? Explain. (Note: You should assume that the accident had no effect on the price of hot dogs or Jane’s preference for caviar.)
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