Economists at Econ Phones Company want to find the relationship between consumer income and demand for Econ Phones. Data shows that when an 800-dollar federal fiscal stimulus was sent to consumers, average consumer income increased .75 percent. Data also shows sales decreased from 11 million to 9 million.Show all work and calculations. (10 point total).

a. What is the income elasticity of demand based on the data given? (5 points).

b. What does the sign of the coefficient (positive or negative) suggest (type of product relevant to income elasticity) (2 points)?

c. Based on the findings, if there is a report that a second fiscal stimulus is being sent to customers, how should Econ Phones prepare (should it make more for fewer phones)? (3 Points)