Price Quantity Demanded Income = Rs. 20000 Quantity Demanded Income = Rs. 24000 Rs. 18 80 DVDs 100 DVDs 20 70 90 24 55 60 28 35 40 32 24 28 Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from Rs.24 to Rs.28 if (i) your income is Rs.20000 and (ii) your income is Rs.24000. Calculate your income elasticity of demand as your income increases from Rs. 20,000 to $24,000 if (i) the price is Rs.18 and (ii) the price is Rs.20.
Price Quantity Demanded Income = Rs. 20000 Quantity Demanded Income = Rs. 24000 Rs. 18 80 DVDs 100 DVDs 20 70 90 24 55 60 28 35 40 32 24 28 Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from Rs.24 to Rs.28 if (i) your income is Rs.20000 and (ii) your income is Rs.24000. Calculate your income elasticity of demand as your income increases from Rs. 20,000 to $24,000 if (i) the price is Rs.18 and (ii) the price is Rs.20.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Problem 6: Suppose that your demand schedule for DVDs is as follows:
|
Price |
Quantity Demanded Income = Rs. 20000 |
Quantity Demanded Income = Rs. 24000 |
|
Rs. 18 |
80 DVDs |
100 DVDs |
|
20 |
70 |
90 |
|
24 |
55 |
60 |
|
28 |
35 |
40 |
|
32 |
24 |
28 |
- Use the midpoint method to calculate your
price elasticity of demand as the price of
DVDs increases from Rs.24 to Rs.28 if (i) your income is Rs.20000 and (ii) your income is
Rs.24000.
- Calculate your income elasticity of demand as your income increases from Rs. 20,000 to $24,000 if (i) the price is Rs.18 and (ii) the price is Rs.20.
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