If Starbucks’s marketing department estimates the income elasticity of demand for its coffee to be 2.8, how will the prospect of an economic bust (expected to decrease consumers’ incomes by 5 percent over the next year) impact the quantity of coffee Starbucks expects to sell?

The percent change in quantity is -0.14%.

Step-by-step explanation:

The formula to compute the change in quantity is:

The income elasticity of demand is 2.80.

Percent change in price is -5% (since the prices decreases)

Compute the percent change in quantity demanded as follows:

Thus, the percent change in quantity is -0.14%.

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step-by-step explanation:

20 feet per second

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-lavira : )