1. Suppose that your demand schedule for CDs is as follows: Price (Tk.) Quantity Quantity Demanded (Income: Tk. 12000) Demanded (Income: 16000) 10 32 90 20 16 40 40 15 80 4 7 160 2 3 a) Calculate the price elasticity of demand for CDs when price increases from 20 to 40 and income is Tk.16000. b) Calculate the income elasticity of demand for CDs when price is 10. c) How will the total revenue change when price of CDs decreases and the income is 12000, explain.

1. Suppose that your demand schedule for CDs is as follows: Price (Tk.) Quantity Quantity Demanded (Income: Tk. 12000) Demanded (Income: 16000) 10 32 90 20 16 40 40 15 80 4 7 160 2 3 a) Calculate the price elasticity of demand for CDs when price increases from 20 to 40 and income is Tk.16000. b) Calculate the income elasticity of demand for CDs when price is 10. c) How will the total revenue change when price of CDs decreases and the income is 12000, explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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1. Suppose that your demand schedule for CDs is as follows:
Price (Tk.) Quantity
Quantity
Demanded (Income: Tk. 12000) Demanded (Income: 16000)
10
32
90
20
16
40
40
15
80
4
7
160
3
a) Calculate the price elasticity of demand for CDs when price increases from 20 to 40 and income is Tk.16000.
b) Calculate the income elasticity of demand for CDs when price is 10.
c) How will the total revenue change when price of CDs decreases and the income is 12000, explain.

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