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Loraine Loraine
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Posts: 9128
6 years ago
The income elasticity of demand for movies in the United States is 3.41. If people's incomes decrease by 1 percent, what is the decrease in the quantity of movies demanded?
Textbook 

Essential Foundations of Economics


Edition: 7th
Authors:
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Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.
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SmooothSmoooth
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6 years ago
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The income elasticity of demand = (percentage change in quantity demanded) ÷ (percentage change in income). Using the numbers in the problem gives 3.41 = (percentage change in quantity demanded) ÷ (1 percent). Rearranging the formula shows (percentage change in quantity demanded) =
(1 percent) × 3.41 = 3.41 percent. Therefore the quantity of movies demanded decreases by 3.41 percent.
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wrote...
6 years ago
Wow, this is exactly what I needed Grinning Face
Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.
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6 years ago
Don't mention it Happy Dummy
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A month ago
Thank you
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