Calculate income elasticity of demand for the product

Assignment Help Microeconomics

Reference no: EM13834295

When income goes up from $20,000 to $30,000, demand for product A is going up from 300 to 400. The price of the product A is $200. However demand for product B is going down from 100 to 50. The price of the of the product B is $10. Is the Product A normal goods or inferior goods? Calculate income elasticity of demand for the product A, using the mid-point approach. Is product B normal goods or inferior goods? Calculate income elasticity of demand for the product B, using the mi-point approach.

Reference no: EM13834295

Questions Cloud

Produces baseball mitts and soccer balls : Consider a nation that produces baseball mitts and soccer balls. The following table shows the possible combinations of the two products: Baseball Mitts 0 2 4 6 8 Soccer Balls 30 24 18 10 0

The steps that the fed can do to stimulate the economy : What are the steps that the Fed can do to stimulate the economy? What are problems with those types of policies? How do you know that they will work?

Prepare a contribution format income statement : Fill in the following table with your estimates of total cost and average cost per cup of coffee at the identical level of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent. Does the average cost per cu..

Determine the objects average velocity over time interval : determine the object's average velocity over the time interval

Calculate income elasticity of demand for the product : When income goes up from $20,000 to $30,000, demand for product A is going up from 300 to 400. The price of the product A is $200. However demand for product B is going down from 100 to 50. The price of the of the product B is $10. Is the Product..

Calculate the cross elasticity of demand : When price of coke rises from $5 to $7, quantities demanded for coke falls from 1000 to 800, and quantities demanded for pepsi rises from 300-400. Calculate the cross elasticity of demand, using the mid-point approach.

Conduct a financial performance and analysis : Discuss the Company and provide a relevant background - Ratio Analysis on the Chosen Company with Interpretation considering Macro Economic and Macro Business Environment

The population of new york city : It is shown that the population of New York City, NY is much greater than that of Irvington, NJ. Employment opportunities, malls, social activities and tourist sites in New York City are therefore more than that in Irvington. If attractiveness for Ne..

What would your ideal capital structure look like : We have looked at liabilities and equity in previous weeks and we are discussing leasing this week. How does the discussion of these items relate to our capital structure? What are the components of the capital structure? What are the differences of ..

User Account

All Pages