Question: Suppose that, at the current price of $1.50 per gallon and average household income of $100,000 a yr, the quantity demanded of bottled water is 200 million gallons a week. If the price were increased to $1.68, the quantity demanded would fall to 158.7 million gallons a week. If the household income were increased to $110, 500 a yr, the quantity demanded would rise to 208 million gallons a week.
(A) Calculate the own price elasticity of demand.
(B) Calculate the income elasticity of demand
(C) According to these estimates, is bottled water a normal or inferior product?
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