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The demand for groceries is relatively inelastic among regular shoppers; economic research suggests that increasing the price of groceries by 10% leads to about a
The demand for groceries is relatively inelastic among regular shoppers; economic research suggests that increasing the price of groceries by 10% leads to about a 3% reduction in the quantity of groceries purchased. Theoretically, what impact the reduction in VAT, from 12% to 10% should have on shoppers' behavior. Discuss and illustrate.
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