Suppose the average income of a consumer named Warren decrease from R18000 to R12000 As a result, the quantity of product A demanded by Warren increase from 200 units to 280 units Use the ARC (midpoint) formula to calculate the income elasticity of demand for product A given the information above Based on your answer in 7 1, is product A an inferior good or a normal good Substantiate your answer with reference to your calculated elasticity value With reference to the cross price elasticity of demand, classify the following values and explain the type of product by providing your own example for each for each Ec 0 5 (3) Ec 2 1

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Question: Suppose the average income of a consumer named Warren decrease from R18000 to R12000. As a result, the quantity of product A demanded by Warren

Suppose the average income of a consumer named Warren decrease from R18000 to R12000. As a result, the quantity of product A demanded by Warren increase from 200 units to 280 units.

Use the ARC (midpoint) formula to calculate the income elasticity of demand for product A given the information above.

Based on your answer in 7.1, is product A an inferior good or a normal good? Substantiate your answer with reference to your calculated elasticity value.

With reference to the cross-price elasticity of demand, classify the following values and explain the type of product by providing your own example for each for each. Ec = -0.5 (3) Ec = 2.1

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