Calculate income elasticity of demand for the product a

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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 Product B is $10.(2 point)

(1) Is the Product A normal goods or inferior goods?

(2) Calculate income elasticity of demand for the Product A, using the mid-point approach.

Calculation Procedures

(3)Is the Product B normal goods or inferior goods?

(4)Calculate income elasticity of demand for the Product B, using the mid-point approach.

Calculation Procedures:

Reference no: EM131866758

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