Emily has decided always to spend one-third of her income on clothing

Emily has decided always to spend one-third of her income on clothing.
a. What is her income elasticity of clothing demand?

b. What is her price elasticity of clothing demand?
c. If Emily’s tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change? What are her income elasticity and price elasticity now?

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply