8 The current income of consumers is R50 000 per household and the quantity demanded of the product is 500 units. A decrease in the income of consumers to R40 000 per household resulted in a decrease in the demand for the product of 200 units. Answer the following questions. (4)

Question Answer
Calculate the income-elasticity coefficient. (Work with % changes). 2
How would consumers classify the product? luxury
Assume a 20% decrease in the income of the consumers. Would the decrease in the demand for the product be greater or less than 20%? greater
Assume a 15% increase in the income of the consumers. Will the increase in demand be greater or less than 15%. greater