Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate
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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.
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Quantity Demanded (income = $20,000) (income = $24,000) Quantity Demanded Price $8 40 pizza 50 pizza 10 32 45 12 24 30 14 16 20 16 12
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