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Question 9 The most important determinant of the price elasticity of demand for a good is whether the good is a necessity or
If a 6 percent increase in income leads to a 4 percent increase in quantity demanded for audio books, the income elasticity o
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Answer #1

1) Solution: the availability of substitutes for the good

Explanation: The main factor for determining the price elasticity of demand for a good is the availability of substitutes. The more number of substitutes, it would have more elastic demand

2) Solution: 0.67

Explanation: Income Elasticity of Demand = % Change in Demand / % Change in Income = 4/6 = 0.67

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