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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