   # Suppose that your demand schedule for pizza is as follows: Price Quantity Demanded (income = $20,000) Quantity Demanded (income =$24,000) $8 40 pizza 50 pizza 10 32 45 12 24 30 14 16 20 16 8 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. BuyFindarrow_forward ### Principles of Macroeconomics (Mind... 8th Edition N. Gregory Mankiw Publisher: Cengage Learning ISBN: 9781305971509 #### Solutions Chapter Section BuyFindarrow_forward ### Principles of Macroeconomics (Mind... 8th Edition N. Gregory Mankiw Publisher: Cengage Learning ISBN: 9781305971509 Chapter 5, Problem 7PA Textbook Problem 18774 views ## Suppose that your demand schedule for pizza is as follows: Price Quantity Demanded (income =$20,000) Quantity Demanded (income = $24,000)$8 40 pizza 50 pizza 10 32 45 12 24 30 14 16 20 16 8 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.

Subpart (a):

To determine
Price elasticity of demand.

### Explanation of Solution

1. (i) If the income is $20,000, then the price of pizza rises from$8 to $10, and the quantity demanded decreases from 40 to 32. By midpoint method, the price elasticity of demand is calculated as follows: Price elasticity of demandIncome$20,000=QuantityPresentQuantityPreviousQuantityPresent+QuantityPrevious2PricePresentPricePreviousPricePresent+PricePrevious2=3240(32+402)108(10+82)=8(36)2(9)=0.22220.2222=1

The price elasticity of demand for pizza is -1

Subpart (b):

To determine
Income elasticity of demand.

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Find more solutions based on key concepts
What does the invisible hand of the marketplace do?

Essentials of Economics (MindTap Course List)

DEBT TO CAPITAL RATIO Bartley Barstools has a market/book ratio equal to 1. Its stock price is 14 per share and...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Develop a profile of a skilled or effective negotiator. 