Compute your income elasticity of demand as your income

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Reference no: EM1350466

Suppose that your demand schedule for compact discs as follows:

price quantitydemand quantity demand
(income=$10000) (income=$12000)

$8 40CDs 50CDsa
10 32 45
12 24 30
14 16 20
16 8 12

A) Use the midpoint method to compute your price elastcityof demand as the price of compact discs increases from $8 to $10 if(i)your income is $10000and (ii)your income is $12000

B) Compute your income elasticity of demand as your incomeincreases from $10000 to $12000 if (i)the price is $12 and (ii)theprice is $16

Reference no: EM1350466

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