Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
6. Law of Demand 2 Suppose that your demand schedule for pizza is as follows: Price Quantity of Pizzas Demanded Quantity of Pizzas Demanded (Dollars)
6. Law of Demand 2
Suppose that your demand schedule for pizza is as follows:
Price | Quantity of Pizzas Demanded | Quantity of Pizzas Demanded |
---|---|---|
(Dollars) | (Income = $20,000) | (Income = $24,000) |
8 | 40 | 50 |
10 | 32 | 45 |
12 | 24 | 30 |
14 | 16 | 20 |
16 | 8 | 12 |
Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $10 to $12 is (0.64/1.57/0.45/2.20) if your income is $20,000 and (2.20/0.64/1.57/0.45)if your income is $24,000.
If the price of a pizza is $12, your income elasticity of demand is (2.20/0.08/1.22/0.06) as your income increases from $20,000 to $24,000. However, if the price of a pizza is $16, your income elasticity is (1.22/0.08/2.20/0.06).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started