7. Problems and Applications Q7 Suppose that your demand schedule for pizza is as follows: Price...
7. Problems and Applications Q7
Suppose that your demand schedule for pizza is as follows:
|
Price |
Quantity of Pizzas Demanded |
Quantity of Pizzas Demanded |
|---|---|---|
|
(Dollars) |
(Income = $20,000) |
(Income = $24,000) |
| 8 | 40 | 50 |
| 10 | 32 | 45 |
| 12 | 24 | 30 |
| 14 | 16 | 20 |
| 16 | 8 | 12 |
Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $10 to $12 is if your income is $20,000 and if your income is $24,000.
If the price of a pizza is $10, your income elasticity of demand is as your income increases from $20,000 to $24,000. However, if the price of a pizza is $12, your income elasticity is .
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7. Problems and Applications Q7
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