Question

The income elasticity is +2 and income increases by

20%. Sales were 5000 units, what will they be now?

Answer 1

Explanation:

The income elasticity is +2.5 and income increases by 20%. Sales were 5000 units, what will they be now? If the income elasticity is +2.5, income increases by 20% and sales were 5000 units, then the sales will increase by 20%*2.5 = 50% to 7500 units.