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 10 12 14 16 40 32 24 16 8 50 1882 45 30 20 Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $8 to $10 is 0.47 if your income is $20,000 and 2.13 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 $14, your income elasticity is 1.22
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 10 12 14 16 40 32 24 16 8 50 1882 45 30 20 Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $8 to $10 is 0.47 if your income is $20,000 and 2.13 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 $14, your income elasticity is 1.22
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 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...
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Transcribed Image Text:6. Law of Demand 2
Suppose that your demand schedule for pizza is as follows:
Price
(Dollars)
8
10
12
14
16
Quantity of Pizzas Demanded Quantity of Pizzas Demanded
(Income $20,000)
(Income $24,000)
40
32
24
16
8
228 22
50
45
30
20
12
Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $8 to $10 is 0.47 if your income is $20,000 and
2.13 if your income is $24,000.
If the price of a pizza is $10, your income elasticity of demand is 1.86
a pizza is $14, your income elasticity is 1.22
as your income increases from $20,000 to $24,000. However, if the price of
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