Suppose you manage a convenience mart and are in charge of ordering products,but the home office sets the prices.In your area,the income elasticity of demand for peanut butter is -0.5.Because of local factory closings,you expect local incomes to decrease by 20% on average in the next month.As a result,you should stock _____ peanut butter.
A)20% more
B)5% more
C)10% more
D)10% less

Question

Quizplus · Accepted Answer

The Answer of Suppose you manage a convenience mart and are in charge of ordering products,but the home office sets the prices.In your area,the income elasticity of demand for peanut butter is -0.5.Because of local factory closings,you expect local incomes to decrease by 20% on average in the next month.As a result,you should stock _____ peanut butter.
A)20% more
B)5% more
C)10% more
D)10% less

Suppose You Manage a Convenience Mart and Are in Charge