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

QUANTITY DEMANDED QUANTITY DEMANDED PRICE (INCOME  $10,000) (INCOME  $12,000)

$ 8 40 50 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.