The quantity demanded of do-it-yourself hair-cutting sets increases from 3000 to 10,000 when the average income decreases from $60,000 to $40,000.
a. Calculate the elasticity.
b. What type of elasticity is this?
c. Use your answer for part B to answer one of the following questions:
If it is elasticity of demand or supply, is it more elastic, more inelastic, or unit elastic? If it is cross price elasticity, are the products compliments or substitutes?
If it is income elasticity, is it a luxury, normal, or inferior good?