Suppose that your demand schedule for pizza is as follows:

Price Quantity Demanded

(income 5 $20,000)

Quantity Demanded

(income 5 $24,000)

$8 40 pizzas 50 pizzas 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.