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7. Computing income and cross elasticity of demand Suppose that when household income in a city rises by 25%, and the price of good X

7. Computing income and cross elasticity of demand

Suppose that when household income in a city rises by 25%, and the price of good X remains unchanged, the quantity demanded of good X increases by 20%. Then, in this city, the income elasticity of demand for good X is , and you know that good X is

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