Question
For the question below can you explain with calculation why the answer is so? Question: Economists estimated that the price elasticity of beer is -0.30
For the question below can you explain with calculation why the answer is so?
Question:
Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means
that
Select one:
a. an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a luxury.
b. an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
c. a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.
d. an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
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