Q1. The following table is a demand schedule for a particular commodity, between which price range is demand elastic? Explain your answer. Hint: At least three calculations, a reduction from K10 000.00 to K9 000.00, K7 000.00 to K6 000.00 and from K5 000.00 to K4 000.00. Price (K’000s Quantity Demanded 10 0 9 10 8 20 7 30 6 40 5 50 4 60 3 70 2 80 1 90 0 100 What do you understand by the term “income elasticity of demand”? Why should a firm pursuing long term growth be interested in the income elasticity of demand of its products?
Q1. The following table is a demand schedule for a particular commodity, between
which price range is demand elastic? Explain your answer. Hint: At least three calculations, a reduction from K10 000.00 to K9 000.00, K7 000.00 to K6 000.00 and from K5 000.00 to K4 000.00.
Price (K’000s Quantity Demanded
10 0
9 10
8 20
7 30
6 40
5 50
4 60
3 70
2 80
1 90
0 100
What do you understand by the term “income
Why should a firm pursuing long term growth be interested in the income elasticity of
demand of its products?
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