The accompanying table shows the price and yearly quantity sold of souvenir Tshirts in the town of Silver Lake according to the average income of the tourists visiting. Price of T-shirt Quantity of T-shirts demanded when the average tourist income is $20,000 Quantity of T-shirts demanded when the average tourist income is $30,000 $43,000 5,000 $5 2,400 4,200 $6 1,600 3,000 $7 800 1,800* I a. Using the midpoint method, calculate the price elasticity of demand when the price of a T-shirt rises from $5 to $6 and the average tourist income is $20,000. Also calculate it when the average tourist income is $30,000. b. Using the midpoint method, calculate the income elasticity of demand when the price of a T-shirt is $4 and the average tourist income increases from $20,000 to $30,000. Also calculate it when the price is $7.
The accompanying table shows the price and yearly quantity sold of souvenir Tshirts in the town of Silver Lake according to the average income of the tourists visiting. Price of T-shirt Quantity of T-shirts demanded when the average tourist income is $20,000 Quantity of T-shirts demanded when the average tourist income is $30,000 $43,000 5,000 $5 2,400 4,200 $6 1,600 3,000 $7 800 1,800* I a. Using the midpoint method, calculate the price elasticity of demand when the price of a T-shirt rises from $5 to $6 and the average tourist income is $20,000. Also calculate it when the average tourist income is $30,000. b. Using the midpoint method, calculate the income elasticity of demand when the price of a T-shirt is $4 and the average tourist income increases from $20,000 to $30,000. Also calculate it when the price is $7.
Chapter4: Supply And Demand: An Initial Look
Section: Chapter Questions
Problem 4TY: The following table summarizes information about the market for principles of economics textbooks:...
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Transcribed Image Text:The accompanying table shows the price and yearly quantity sold of
souvenir Tshirts in the town of Silver Lake according to the average
income of the tourists visiting. Price of T-shirt Quantity of T-shirts
demanded when the average tourist income is
$20,000 Quantity of T-shirts demanded when the average tourist income
is $30,000 $43,000 5,000 $5 2,400 4,200 $6 1,600 3,000 $7 800 1,800*
I
a. Using the midpoint method, calculate the price elasticity of demand
when the price of a T-shirt rises from $5 to $6 and the average
tourist income is $20,000. Also calculate it when the average
tourist income is $30,000.
b. Using the midpoint method, calculate the income elasticity of
demand when the price of a T-shirt is $4 and the average tourist
income increases from $20,000 to $30,000. Also calculate it when
the price is $7.
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