Net effect of increases in price-income on quantity demanded

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If the price elasticity of demand is –0.6 and the income elasticity is +0.25, then what is the effect of a simultaneous 10% increase in price and a 20% increase in income on total health expenditures (again just the direction, do not need to calculate the exact change in dollars)? Explain your answer. (Hint: What is the net effect of the increases in price and income on quantity demanded?)

Reference no: EM131238958

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