a) The number of new apartments demanded in a city dropped from 40,000 to 37,500 as...

a) The number of new apartments demanded in a city dropped from 40,000 to 37,500 as the result of a rent increase from $1180 to $2110 per month. Calculate the price elasticity of demand for apartments. Use the midpoint formula. Are they elastic/inelastic/unit elastic?

b) When the average consumer income in a county in the UK increased from £21,000 to £22155, the number of movie tickets bought increased from 2350 to 2800 per month. Calculate the income elasticity of demand using the midpoint formula. Discuss the nature of the product.

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Rahul Sunny answered 6 months ago

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