6) The accompanying table shows the price and yearly quantity sold of souvenir T-shirts in the town of Pokhara, Nepal according to the average income of the tourists visiting. Price Quantity Demanded when Quantity Demanded Income 20,000 Income 30,000 I. II. 4 5 6 7 3000 2400 1600 800 5000 4200 3000 1800 when Using the midpoint method, calculate the income elasticity of demand when the price of a T-shirt is 4 Nepalese Rupees and the average tourist income increases from 20,000 to 30,000 rupees. Also calculate it when the price is 7 rupees. Also answer the following questions for each cases ● The demand for this product is income elastic / income inelastic. Based on this information, T-shirts would be considered as (luxuries / necessities) Using the midpoint method, calculate the price elasticity of demand when the price of a T-shirt rises from 5 to 6 rupees and the average tourist income is 20,000. Also calculate it when the average tourist income is 30,000.
6) The accompanying table shows the price and yearly quantity sold of souvenir T-shirts in the town of Pokhara, Nepal according to the average income of the tourists visiting. Price Quantity Demanded when Quantity Demanded Income 20,000 Income 30,000 I. II. 4 5 6 7 3000 2400 1600 800 5000 4200 3000 1800 when Using the midpoint method, calculate the income elasticity of demand when the price of a T-shirt is 4 Nepalese Rupees and the average tourist income increases from 20,000 to 30,000 rupees. Also calculate it when the price is 7 rupees. Also answer the following questions for each cases ● The demand for this product is income elastic / income inelastic. Based on this information, T-shirts would be considered as (luxuries / necessities) Using the midpoint method, calculate the price elasticity of demand when the price of a T-shirt rises from 5 to 6 rupees and the average tourist income is 20,000. Also calculate it when the average tourist income is 30,000.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 6PA: The price of coffee rose sharply last month, while the quantity sold remained the same. Five people...
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Transcribed Image Text:I.
II.
6) The accompanying table shows the price and yearly quantity sold of souvenir T-shirts in the town
of Pokhara, Nepal according to the average income of the tourists visiting.
Price Quantity Demanded when Quantity Demanded when
Income=20,000
Income 30,000
4
5
6
7
3000
2400
1600
800
5000
4200
3000
1800
Using the midpoint method, calculate the income elasticity of demand when the price of a T-shirt
is 4 Nepalese Rupees and the average tourist income increases from 20,000 to 30,000 rupees.
Also calculate it when the price is 7 rupees. Also answer the following questions for each cases
● The demand for this product is income elastic / income inelastic.
● Based on this information, T-shirts would be considered as (luxuries / necessities)
Using the midpoint method, calculate the price elasticity of demand when the price of a T-shirt
rises from 5 to 6 rupees and the average tourist income is 20,000. Also calculate it when the
average tourist income is 30,000.
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