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Estimate the arc price elasticity of demand

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The AIROD Aircraft Company manufactures small, pleasure-use aircraft. The following data pertaining  to AIROD Aircraft Company's sales, selling prices and consumers' personal income were collected:

Year

Aircraft Sales (Units)

Average Price ($ millions)

Disposable income ($ millions)

2013

8,000

100

650

2014

10,000

89.50

610

2015

8,000

109.5

590
  1. Estimate the arc price elasticity of demand using the 2013 and 2014 data. Explain.
  2. Estimate the arc income elasticity of demand using the 2013 and 2014 data. Explain

Reference no: EM133080850

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