Question
Please help to calculate elasticity and answer questions. Thank you. Konstantinos likes to play futsal (football 5x5). The number of times per year that he
Please help to calculate elasticity and answer questions. Thank you.
Konstantinos likes to play futsal (football 5x5).
The number of times per year that he plays depends on both the price of playing
an hour of futsal and Konstantinos' income and the cost of alternative types of entertainment and, in particular, how much it costs to see a movie instead of playing futsal.
The three demand schedules in the table below show how many futsal games per year Konstantinos will demand at each price under three different scenarios.
In scenario D1, Konstantinos' income is 50,000 per year, and movies cost 9 each. In scenario D2, Konstantinos' income is also 50,000 per year, but the price of seeing a movie ticket rises to 11. And in scenario D3, Konstantinos's income goes up to 70,000 per year, while movies cost 11.
Quantity demanded
Price/hour (). D1 D2 D3
50 15 10 15
35 25 15 30
20 40 20 50
- Using the data under D1 and D2, calculate the cross elasticity of Konstantinos' demand for futsal at all three prices. Is the cross elasticity the same at all three prices? Are movies and futsal substitute goods, complementary goods, or independent goods?
- Using the data under D2 and D3, calculate the income elasticity of Konstantinos' demand for futsal at all three prices. Is the income elasticity the same at all three prices? Is futsal an inferior good?
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