Answer Happy

The article states that existing JCPenney customers had
incomes in 2020 about equal to the U.S. median income of $67,500
for all households. Holding everything else equal, would the price
elasticity of demand for a good sold at JCPenney stores be greater
for a consumer who had an income of $67,500 in 2020 or for a
consumer who had an income twice as great - $135,000 – in 2020?
Briefly explain your answer.
Assume that a consumer’s income increased from $67,500
in 2020 to $135,000 in 2021. This consumer spent 10 percent of her
income ($6,750) on gasoline in 2020. If the income elasticity of
demand for gasoline was equal to +0.8, would she spend more or less
than $13,500 on gasoline in 2021? Briefly explain your
answer.
From the article: “JCPenney can’t raise its prices
indiscriminately on customers who value affordability…” JCPenney
recently advertised a women’s short sleeve dress for $49.99. (a)
Which value of the price elasticity of demand for the short sleeve
dress would the demand be more inelastic: -1.1 or -0.5? (b) If
JCPenney lowered the price of the dress to $39.99 would the demand
be more elastic or less elastic? Briefly explain your
answers.