6. Suppose that your demand schedule for compact discs is as follows:

Quantity Demanded Quantity Demanded Price (income = $10,000) (income = $12,000)

$ 8 40 CDs 50 CDs 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 compact discs increases from $8 to $10 if

(i) your income is $10,000 and (ii) your income is $12,000.

b. Calculate your income elasticity of demand as your income increases from $10,000 to

$12,000 if (i) the price is $12 and (ii) the price is $16. P=-5