If a product has an income elasticity of demand of -2.5 (minus 2.5), and buyers incomes decrease
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Question:
If a product has an income elasticity of demand of -2.5 (minus 2.5), and buyers’ incomes decrease by 50%, then:
purchases of this product will fall by 50%.
purchases of this product will fall by 2.5%.
purchases of this product will increase by 150%.
purchases of this product will fall by 75%.
purchases of this product will increase by 20%.
'purchases of this product will increase by 125%.
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