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Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that

• an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.

• an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.

• a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.

• an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a luxury.
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Microeconomics

Microeconomics


Edition: 7th
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Strategyboyz21Strategyboyz21
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be b. Author
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Brilliant
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