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Considerthreefirmssellinggoodsonefirmsellsagoodwithanincomeelasticityof demand less than zero, one firm sells a good with an income elasticity of demand greater than zero but less than one, and one
Considerthreefirmssellinggoodsonefirmsellsagoodwithanincomeelasticityof demand less than zero, one firm sells a good with an income elasticity of demand greater than zero but less than one, and one firm sells a good with an income elasticity of demand greater than one. During a severe economic downturn, which firm is likely to see its sales decline the most? Which firm is likely to see its sales increase the most? Explain.
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