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In St. Pau, MN. Best Buy sells seventy-five 50" HDTVs per week whereas the Minneapolis, MN store sells only fifty 50" HDTVs per week. Based upon data obtained in the financing process, St. Paul customers earn an average income of $55,000 per year, while Minneapolis customers earn $48,000 per year.
A. Calculate the implied arc income elasticity of demand.
B. How would you characterize demand for these 50" HDTVs?
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