Question: Using either the arc elasticity formula or calculus, calculate income elasticity of demand (E) for pizza around (i.e., +/- 1%) an income of $5.00, given

Using either the arc elasticity formula or calculus, calculate income elasticity of demand (E) for pizza around (i.e., +/- 1%) an income of $5.00, given a market price for pizza of $7.50, and given the following information: Where: = QPizza 30 - 2pPizza +21+ 4pBurger - 3pBeer QPizza = 55+2pPizza - 2pLabor - 1pCheese - 3pTomatoes = I= income pBurger price of burger = 4 pBeer price of beer = 2 1 5 = pLabor labor wage rate = 10 pCheese = price of cheese = 6 - pTomatoes = price of tomatoes = - 3

Using either the arc elasticity formula or calculus, calculate income elasticity of demand (E1) for pizza around (i.e., +/1% ) an income of $5.00, given a market price for pizza of $7.50, and given the following information: QDPizza=302PPizza+2I+4PBurger3PBeerQSPizza=55+2PPizza2PLabor1PCheese3PTomatoes Where: I=income=5PBurger=priceofburger=4PBeer=priceofbeer=2PLabor=laborwagerate=10PCheese=priceofcheese=6PTomatoes=priceoftomatoes=3

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