The schedule below shows the quantities of shoes demanded at each incomelevel in a community from 2020 to 2021:YearIncome (R)Quantity (units)20205 0001 00020216 5009003.1Calculate the income elasticity of demand, using the arc method andinterpret your result.3.2List any four factors that could result in the shoes having inelastic priceelasticity of demand.3.3Explain the importance of understanding the relationship between priceelasticity of demand and total revenue.

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The schedule below shows the quantities of shoes demanded at each income level in a community from 2020 to 2021: Year Income (R) Quantity (units) 2020 5 000 1 000 2021 6 500 900 Calculate the income elasticity of demand, using the arc method and interpret your result. 3.1 3.2 List any four factors that could result in the shoes having inelastic price elasticity of demand. 3.3 Explain the importance of understanding the relationship between price elasticity of demand and total revenue.

The schedule below shows the quantities of shoes demanded at each income level in a community from 2020 to 2021: Year Income (R) Quantity (units) 2020 5 000 1 000 2021 6 500 900 Calculate the income elasticity of demand, using the arc method and interpret your result. 3.1 3.2 List any four factors that could result in the shoes having inelastic price elasticity of demand. 3.3 Explain the importance of understanding the relationship between price elasticity of demand and total revenue.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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