What is the income elasticity coefficient for Good X between $100 and $90? (Round to hundredth please.)
Row | Price of Good X | Quantity Demand of Good X | Quantity Supply of Good X | Price of Good Y | Buyer's Income |
|---|---|---|---|---|---|
1 | $1 | 40 | 15 | $10 | $120 |
2 | 2 | 38 | 15 | 11 | $110 |
3 | 3 | 36 | 26 | 12 | $110 |
4 | 4 | 28 | 28 | 13 | $105 |
5 | 5 | 18 | 35 | 13 | $100 |
6 | 6 | 3 | 50 | 14 | $90 |
7 | 6 | 3 | 100 | 10 | $50 |
Use this table for ALL calculations. Heads up...there are NO mistakes in this table. The table may or may not represent functions that you are familiar with. FOCUS only on the parts of the table that are requested in your problem.
Using the midpoint formula and the table above, when the price for Good X increases from $1 to $2 the price elasticity of demand is , implying the quantity demand over this price range is .
Relatively Price Inelastic
Perfectly Price Elastic
Perfectly Price Inelastic
Between 1 and Infinity
Between 0 and 1
Infinite
The quantity effect for Good X is 0 between rows on the table.
Using the table above. When performing the total revenue test from rows 5 and 6, the price from $5 to $6. At the same time, total revenue from to . These results would indicate that demand is over this price range, given that both price and quantity do change by some amount.
Based on the table, the cross price elasticity between Goods X and Goods Y would be calculated by setting up the formula of (/ ) divided by (/) . We can also condense this formula into /.