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Suppose the demand schedule for burritos is as follows:Quantity Demanded (Income $30,000)PriceQuantity Demanded (Income $90,000)$52025$61622$71215$8810$94Use the midpoint method to calculate the price elasticity of demand for burritos if the priceincreases from $7 to $8 for someone with $30,000 of income.1.Use the midpoint method to calculate the price elasticity of demand for burritos if the priceincreases from $7 to $8 for someone with $90,000 of income.2.Is demand for burritos elastic or inelastic for customers earning $30,000? Explain.3.Is demand for burritos elastic or inelastic for customers earning $90,000? Explain.4.

Question

1.

Suppose the demand schedule for burritos is as follows:
Quantity Demanded (Income $30,000)
Price
Quantity Demanded (Income $90,000)
$5
20
25
$6
16
22
$7
12
15
$8
8
10
$9
4
Use the midpoint method to calculate the price elasticity of demand for burritos if the price
increases from $7 to $8 for someone with $30,000 of income.
1.
Use the midpoint method to calculate the price elasticity of demand for burritos if the price
increases from $7 to $8 for someone with $90,000 of income.
2.
Is demand for burritos elastic or inelastic for customers earning $30,000? Explain.
3.
Is demand for burritos elastic or inelastic for customers earning $90,000? Explain.
4.
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Suppose the demand schedule for burritos is as follows: Quantity Demanded (Income $30,000) Price Quantity Demanded (Income $90,000) $5 20 25 $6 16 22 $7 12 15 $8 8 10 $9 4 Use the midpoint method to calculate the price elasticity of demand for burritos if the price increases from $7 to $8 for someone with $30,000 of income. 1. Use the midpoint method to calculate the price elasticity of demand for burritos if the price increases from $7 to $8 for someone with $90,000 of income. 2. Is demand for burritos elastic or inelastic for customers earning $30,000? Explain. 3. Is demand for burritos elastic or inelastic for customers earning $90,000? Explain. 4.

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Step 1

Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If you want remaining sub-parts to be solved, then please resubmit the whole question and specify those sub-parts you want us to solve.

(1)

The mid-point elasticity can be estimated using the following formula:

Q2-01
Q1+Q2
2
Mid -Point elasticity
P2-P1
P1+P2
2
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Q2-01 Q1+Q2 2 Mid -Point elasticity P2-P1 P1+P2 2

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Step 2

Here, when income = $30, 000 and price rises from $7 to $8 then quantity changes from 12 units to 8 units. That is, assume P1 = $7, Q1 = 12 units, P2 = $8, and Q2 = 8 units. Hence, the mid-point elasticity is

8-12
12 8
2
Mid -Point elasticity
8 7
8 7
2
1
x2/-
x2
15
20
15
20
1
-3
I II
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8-12 12 8 2 Mid -Point elasticity 8 7 8 7 2 1 x2/- x2 15 20 15 20 1 -3 I II

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Step 3

(2)

Here, income = $90, 000 and price rises from $7 to $8 then quantity changes from 12 units to 8 units. That...

10-15
15 10
2
Mid - Point elasticity=
8-7
8 7
2
2/
x2
15
25
15
25
-3
I I
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10-15 15 10 2 Mid - Point elasticity= 8-7 8 7 2 2/ x2 15 25 15 25 -3 I I

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Measurements of elasticity

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