Question

# II-0. Suppose that your demand schedule for Movie is as below. Price Quantity Demanded when income...

II-0. Suppose that your demand schedule for Movie is as below.

 Price Quantity Demanded when income =\$10,000 Quantity Demanded when income =\$20,000 \$5 50 60 \$7 40 55 \$9 30 50 \$11 20 45 \$13 10 40

Now the movie ticket price is \$7 each. If the ticket price rises to \$9 each,

Calculate the price elasticity of demand using midpoint method when your income is \$10,000.

Step 1

How much is the change in quantity demanded?

 What is the mid point of the quantities demanded between before and after change? Step 2 How much is the change in price? What is the mid point of the prices between before and after change? Step 3 What is the price elasticity of demand when the price changes from \$7 to \$9 and your income is \$10,000? calculate   - (a/b) / (c/d)   What is the price elasticity of demand?

Calculate the price elasticity of demand using midpoint method when your income is \$20,000.

Step 1 -How much is the change in quantity demanded?

What is the mid point of the quantities demanded between before and after change?

Step 2 -How much is the change in price?

What is the mid point of the prices between before and after change?

Step 3-What is the price elasticity of demand when the price changes from \$7 to \$9 and your income is \$20,000?

calculate      - (a/b) / (c/d)

What is the price elasticity of demand?

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