Suppose an increase in supply lowers the price from 10 to 8 and increases the quantity demanded from 100 to 130. Using the midpoint method, what is the elasticity of demand equals to?
Suppose an increase in supply lowers the price from 10 to 8 and increases the quantity demanded from 100 to 130. Using the midpoint method, what is the elasticity of demand equals to?
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Suppose that your demand schedule for pizza is as follows:
| Price | Quantity Demanded (Income=$20,000) |
Quantity Demanded(Income = $24,000) |
| $8 | 40 pizza | 50 pizza |
| 10 | 32 | 45 |
| 12 | 24 | 30 |
| 14 | 16 | 20 |
| 16 | 8 | 12 |
a. Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from $8 to $10 if (i) your income is $20,000and (ii) your income is $24,000.
b.Calculate your income elasticity of demand as your income increases from $20,000 to $24,000 if (i) the price is 12 and (ii) the price is $16.
suppose that your demand schedule for pizza is as follows:
|
Price
|
Quantity of Pizzas Demanded
|
Quantity of Pizzas Demanded
|
|---|---|---|
|
(Dollars)
|
(Income = $20,000)
|
(Income = $24,000)
|
| 8 | 40 | 50 |
| 10 | 32 | 45 |
| 12 | 24 | 30 |
| 14 | 16 | 20 |
| 16 | 8 | 12 |
1. Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $10 to $12 is______if your income is $20,000 and________ if your income is $24,000.
2. If the price of a pizza is $10, your income elasticity of demand is ______ as your income increases from $20,000 to $24,000. However, if the price of a pizza is $12, your income elasticity is _______.
