Suppose you manage a convenience mart and are in charge of ordering products but do not set the price.The home office provides the prices.In your area, the income elasticity of demand for peanut butter is -0.5.Due to local factory closings, you expect local incomes to decrease by 20% on average in the next month.As a result, you should stock:
A.20% more peanut butter on the shelves.
B.5% more peanut butter on the shelves.
C.10% more peanut butter on the shelves.
D.10% less peanut butter on the shelves.

Question

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The Answer of Suppose you manage a convenience mart and are in charge of ordering products but do not set the price.The home office provides the prices.In your area, the income elasticity of demand for peanut butter is -0.5.Due to local factory closings, you expect local incomes to decrease by 20% on average in the next month.As a result, you should stock:
A.20% more peanut butter on the shelves.
B.5% more peanut butter on the shelves.
C.10% more peanut butter on the shelves.
D.10% less peanut butter on the shelves.

Suppose You Manage a Convenience Mart and Are in Charge