1. Use the above graph to answer the following questions. 
2. 
   
3. What is the price elasticity of demand over the price range of 21 and 25? (use the midpoint method) 
4. 
   
5. Is the consumer elastic, inelastic, or unit elastic? Will a price increase from 21 to 25 result in an increase in revenue or a decrease in revenue?
6. 
   
7. Given that: Income elasticity of demand is +4, income increases by 5%, and the price of the above good remain constant at $13. 
8. 
   
9. What will be the new quantity demanded by consumers? Draw in the appropriate curve on the above graph that represents the shift that results from the change in income.
10.  

Transcribed Image Text:

Price (S.U.S.) 30 P₁ KLA 25 21 13 2 8028 Supply Demand Quantity (units) Price (S.U.S.) 30 P₁ KLA 25 21 13 2 8028 Supply Demand Quantity (units)

Answer rating: 100% (QA)

Q13 are already answered Q4 Income elasticity 4 P 10 ... View the full answer