Monthly demand and supply schedule for t-shirts are given by: PRICE 8 7 6 5 4 3 2 1 QUANTITY DEMANDED 6 8 10 12 14 16 18 20 QUANTITY SUPPLIED 18 16 14 12 10 8 6 4 INCOME 100 150 200 250 300 350 400 450 a) What is the Price Elasticity of Demand for a price change from $7 to $5? Is it elastic or inelastic? (Use the Arc Elasticity Formula) b) What is the Price Elasticity of Supply for a price change from $7 to $5? Is it elastic or inelastic? (Use the Arc Elasticity Formula) c) Using Total Revenue, is demand elastic or inelastic for a price change from $4 to $3? d) What is the Income Elasticity of Demand for t-shirts when income decreases from $300 to $250? (Use the Arc Elasticity Formula)

/in /by

Monthly demand and supply schedule for t-shirts are given by:

PRICE

8

7

6

5

4

3

2

1

QUANTITY DEMANDED

6

8

10

12

14

16

18

20

QUANTITY SUPPLIED

18

16

14

12

10

8

6

4

INCOME

100

150

200

250

300

350

400

450

 

a) What is the Price Elasticity of Demand for a
price change from $7 to $5? Is it elastic or inelastic? (Use the Arc
Elasticity Formula)

b) What is the Price Elasticity of Supply for a
price change from $7 to $5? Is it elastic or inelastic? (Use the Arc
Elasticity Formula)

c) Using Total Revenue, is demand elastic or
inelastic for a price change from $4 to $3?

d) What is the Income Elasticity of Demand for
t-shirts when income decreases from $300 to $250? (Use the Arc
Elasticity Formula)

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