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With the recession, average incomes have fallen from $44,375 to $41,720. Before the recession Groucho's Gizmos sold 600 gizmos a month. As an economics, predict the number of gizmos that will be sold for the following income elasticities and explain what type of good a gizmo is in the eyes of consumers (you must use the income elasticity coefficient to explain your answer).
a) EI = 1.5 b) EI = 0.5 c) EI = -2.0
The elasticity coefficient is a number measured using price and quantity data to verify how responsive consumers are to changes in the price of a commodity. The elasticity coeffic
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