Suppose that your demand schedule for CD is as follows: PriceQuantity demand (income =$10 000)Quantity demand (income =$12 000)$8405010324512243014162016812 Calculate your price elasticity of demand as the price of CD increases from $8 to $10 if i) your income is $10 000 and ii) your income is $12 000.Calculate your income elasticity of demand as your income increase from $10 000 to 12 000 if i) the price is $12 and ii) the price is $16.

ANS Price Elasticity of demand (PED) = % change in quantity demanded% change in price When the price…

Answered: Suppose that your demand schedule for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that your demand schedule for CD is as follows:

Price	Quantity demand (income =$10 000)	Quantity demand (income =$12 000)
$8	40	50
10	32	45
12	24	30
14	16	20
16	8	12

Calculate your price elasticity of demand as the price of CD increases from $8 to $10 if i) your income is $10 000 and ii) your income is $12 000.
Calculate your income elasticity of demand as your income increase from $10 000 to 12 000 if i) the price is $12 and ii) the price is $16.

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