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After Chelseas income increased from $12,000 to $18,000 a year, her purchases of music
Chapter 0, Problem 1(choose chapter or problem)
After Chelseas income increased from $12,000 to $18,000 a year, her purchases of music downloads increased from 10 to 40 music downloads a year. Calculate Chelseas income elasticity of demand for music downloads using the midpoint method.
Questions & Answers
QUESTION:
After Chelseas income increased from $12,000 to $18,000 a year, her purchases of music downloads increased from 10 to 40 music downloads a year. Calculate Chelseas income elasticity of demand for music downloads using the midpoint method.
ANSWER:Step 1 of 2
An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small.