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Ii other restaurant meals are inferior goodsnormal

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Unformatted text preview: ome elasticity of demand for meals purchased at other types of restaurants is 0.4. a. Due to the fall in the stock market and general economic downturn, incomes decrease by 10 percent. What will happen to the quantity of fast food meals purchased? What will happen to the quantity of meals purchased in other restaurants? b. In each case, circle the best answer: i. Fast food meals are inferior goods/normal goods. ii. Other restaurant meals are inferior goods/normal goods. 2 4. (20 points) Assume that the demand and supply curves for commodity X are described by the following graph. !" !!" !#" $" %" &" '" (" $" %" &(""%#""%(""$#""$(""!##""!#(""#" a. What is the equilibrium price and quantity? b. What quantity tax amount should be chosen...
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