Income elasticity, Microeconomics

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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


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