Question No 2: Suppose that your demand schedule for pizza is as follows: Price ($) Quantity demanded (income = $20 000) Quantity demanded (income = $24 000) 8 40 pizza 50 pizza XXXXXXXXXX XXXXXXXXXX...

Question No 2: Suppose that your demand schedule for pizza is as follows:

Price ($) Quantity demanded
(income = $20 000)

Quantity demanded
(income = $24 000)
8 40 pizza 50 pizza
10 32 45
12 24 30
14 16 20

(a): Using the midpoint method, calculate your price elasticity of demand as the price of
pizza increases from $8 to $10 if (i) your income is $20 000, and (ii) your income is $24 000.
(b): Using the midpoint method, calculate your income elasticity of demand as your
income increases from $20 000 to $24 000 if (i) the price is $12, and (ii) the price is $16.