Suppose that your demand schedule for compact discs is as follows Quantity Demanded (income-$10, 000) 40 CDs Price $8 $10 $12 $14 $16 32 24 16 8 Quantity Demanded (income $12, 000) 50 CDs 45 322 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of compact dises increase from $8 tp, $10 if (i) your income is $10,000 and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $12 and (ii) the price is $16. Use the midpoint method.

Suppose that your demand schedule for compact discs is as follows Quantity Demanded (income-$10, 000) 40 CDs Price $8 $10 $12 $14 $16 32 24 16 8 Quantity Demanded (income $12, 000) 50 CDs 45 322 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of compact dises increase from $8 tp, $10 if (i) your income is $10,000 and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $12 and (ii) the price is $16. Use the midpoint method.

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

Suppose that your demand schedule for compact discs is as follows
Quantity Demanded
(income-$10, 000)
40 CDs
Price
$8
$10
$12
$14
$16
32
24
16
8
Quantity Demanded
(income $12, 000)
50 CDs
45
322
30
20
12
a. Use the midpoint method to calculate your price elasticity of demand as the price of compact
dises increase from $8 tp, $10 if (i) your income is $10,000 and (ii) your income is $12,000.
b. Calculate your income elasticity of demand as your income increases from $10,000 to
$12,000 if (i) the price is $12 and (ii) the price is $16. Use the midpoint method.

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