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A research economist has estimated the price elasticity of demand for cigarettes to be between 0.3 and 0.4, and the income elasticity of demand to be 0.5. The same researcher found that price elasticity of demand for refrigerators is between 1.00 and 2.00, and the income elasticity is between 1.00 and 2.00.
Why are the results for refrigerators so different from those cigarettes. Explain very clearly.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91229201

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