Normal elastic normal inelastic or inferior spam

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Unformatted text preview: rior good) Income Elasticity Income Which of the following goods are normal elastic, normal inelastic or inferior? • Spam • Cigarettes • Food • Trips to Disney World • Nannies Price Elasticity of Supply Price • a measure of the responsiveness of a product’s quantity supplied to a change in the product’s price • = % change in quantity supplied % change in price • = change in quantity / average quantity change in price / average price Price (dollars per pizza) Price Elasticity of Supply Price 40.00 An increase in demand brings ... Sa Large price change Large and small quantity change change 30.00 20.00 10.00 0 … a large large price rise... … and a small and quantity increase 5 10 13 15 20 D1 25 D0 Quantity (pizzas per hour) Price (dollars per pizza) Price Elasticity of Supply Price 40.00 Smal...
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