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The income elasticity of demand for your firm's product

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The income elasticity of demand for your firm's product is estimated to be 0.75. A recent report in The Wall Street Journal says that national income is expected to decline by 3 percent this year.;a. What should you do with your stock of inventories? (Give numeric answer);b. What do you expect to happen to your sales? (Give numeric answer);c. How would you answer parts a and b if you expected a 5 percent increase in income instead of a decrease? (Give numeric answer)

 

Paper#29833 | Written in 18-Jul-2015

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