Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that
A) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
B) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.
C) an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a luxury.
D) an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
A
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On November 7, 1996, the Distilled Spirits Council of the United States decided to end its voluntary ban on television and radio liquor advertisement. The ban on hard liquor advertising had been in effect since 1936 for radio and 1948 for television
Did the lifting of this ban likely increase or decrease the profits of hard liquor companies? Briefly explain.
C = 3,600 + (mpc)y
I = 1,200 G = 1,400 NX = -200 If the equilibrium level of GDP is $30,000, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume. What will be an ideal response?