Question
In: Economics
suppose that your demand schedule for pizza is as follows: price (dollars) quantity of pizzas demanded...
suppose that your demand schedule for pizza is as follows:
| price (dollars) | quantity of pizzas demanded (income= $20,000) | quantity of pizzas demanded (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 increase from $14 to $16 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 ____?
Solutions
Expert Solution
Using the midpoint method, your price elasticity of demand as the price of pizzas increase from $14 to $16 is (- 5) if your income is $20,000 and (- 3.75) if your income is $24,000.
if the price of a pizza is $10 your income elasticity of demand is (1.86) as your income increases from $20,000 to $24,000. However if the price of a pizza is $12 your income elasticity is (1.22).
Rahul Sunny answered 2 years agoRelated Solutions
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Quantity Demanded
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600
8
500
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400
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300
11
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12
100
13
0
Q
TFC
MC
TC
ATC
1
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4
3
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6
4
9
8
5
9
10
6
9
12
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6
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1
4
2
3
3
2
4
1
5
0
6
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