ELASTICITY OF DEMAND AND SUPPLY

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

	quantity demanded	quantity demanded
price	(income= 10,000)	(income= 12,000)
Php 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 Php 8 to Php 10 if:

your income is Php 10,000

b. Calculate your income elasticity of demand as your income increases from Php 10,000 to Php 12,000 if:

the price is Php 12

4. Several years ago, flooding along Tago river destroyed thousands of hectares of rice.

a. What information would you need about the market for wheat in order to assess whether farmers as a group were hurt or helped by the floods