a. Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from $8 to $10 if (i) your income is $20,000 and (ii) your income is $24,000. b. Calculate your income elasticity of demand as your income increases from $20,000 to $24,000 if (i) the price is $12 and (ii) the price is $16.

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...
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2. Suppose that your demand schedule for pizza is as follows:
Price
$8
10
12
14
16
Quantity Demanded
(income = $20, 000)
40 pizzas
32
24
16
8
Quantity Demanded
(income = $24, 000)
50 pizzas
45
30
20
12
a. Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from $8
to $10 if (i) your income is $20,000 and (ii) your income is $24,000.
b. Calculate your income elasticity of demand as your income increases from $20,000 to $24,000 if (i) the
price is $12 and (ii) the price is $16.
Transcribed Image Text:2. Suppose that your demand schedule for pizza is as follows: Price $8 10 12 14 16 Quantity Demanded (income = $20, 000) 40 pizzas 32 24 16 8 Quantity Demanded (income = $24, 000) 50 pizzas 45 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from $8 to $10 if (i) your income is $20,000 and (ii) your income is $24,000. b. Calculate your income elasticity of demand as your income increases from $20,000 to $24,000 if (i) the price is $12 and (ii) the price is $16.
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