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 $20,000 and (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.
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 $20,000 and (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.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...
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VIEWStep 2: a. (i) Price elasticity of demand when price increases from $8 to $10 (at income = $20,000)
VIEWStep 3: a. (ii) Price elasticity of demand when price increases from $8 to $10 (at income = $24,000)
VIEWStep 4: b. (i) Income elasticity of demand when income increases from $20,000 to $24,000 (at price = $12)
VIEWStep 5: b. (ii) Income elasticity of demand when income increases from $20,000 to $24,000 (at price = $16)
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