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You are the marketing manager for XYZ Corp

Economics

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You are the marketing manager for XYZ Corp. You have this regression result for your product:

Q=2000-3.5P+1.2I Right now your price is 10 and the average income of your customers is $30,000.

a. Compute income elasticity

b. Is your good a normal good or an inferior good?

c. You expect recession. You estimate that your customers average income will fall 5% due to this recession. Estimate the impact on your sales.