questiona. Calculate and interpret the income elasticity for Product B, if a customer’s income changes fromP15,000 to P25,000. give interpretationb. Calculate and interpret the income elasticity for Product A, if another customer’s incomechanges from P15,000 to P25,000. give interpretation Income Elasticity of DemandPercentage change in quantity demandedEpPercentage change in incomeQ2 - Q1x 10% Change in quantity =(Q2 + Q1)/2I2 - 14x 100(12 + 1)/2% Change in incomeWhere:Q2 = Current quantityQ1= Previous quantityIz = Current income1,= Previous income 3. The following table shows the daily quantity sold for two (2) products in Brigg's Warehouse accordingto the average income of customers.Quantity demanded if income is P15,000Quantity demanded if income is P25,000Product A2015Product B1218

Income elasticity of demand: Ey = % change in quantity demanded% change in incomeEy =…

question a. Calculate and interpret the income elasticity for Product B, if a customer’s income changes from P15,000 to P25,000. give interpretation b. Calculate and interpret the income elasticity for Product A, if another customer’s income changes from P15,000 to P25,000. give interpretation

question a. Calculate and interpret the income elasticity for Product B, if a customer’s income changes from P15,000 to P25,000. give interpretation b. Calculate and interpret the income elasticity for Product A, if another customer’s income changes from P15,000 to P25,000. give interpretation

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

question

a. Calculate and interpret the income elasticity for Product B, if a customer’s income changes from
P15,000 to P25,000. give interpretation

b. Calculate and interpret the income elasticity for Product A, if another customer’s income
changes from P15,000 to P25,000. give interpretation

Income Elasticity of Demand
Percentage change in quantity demanded
Ep
Percentage change in income
Q2 - Q1
x 10
% Change in quantity =
(Q2 + Q1)/2
I2 - 14
x 100
(12 + 1)/2
% Change in income
Where:
Q2 = Current quantity
Q1= Previous quantity
Iz = Current income
1,= Previous income

3. The following table shows the daily quantity sold for two (2) products in Brigg's Warehouse according
to the average income of customers.
Quantity demanded if income is P15,000
Quantity demanded if income is P25,000
Product A
20
15
Product B
12
18

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