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# The accompanying table shows the price and yearly quantity sold of souvenir T-shirts in the town of Crystal Lake according to the average income of the tourists visiting. Price of T-Shirt

• The accompanying table shows the price and yearly quantity sold of souvenir T-shirts in the town of Crystal Lake according to the average income of the tourists visiting.
 Price of T-Shirt Quantity Demanded I = \$20G Quantity Demanded I=\$30G 4 3000 5000 5 2400 4200 6 1600 3000 7 800 1800
• a) Using the midpoint method, calculate the price  elasticity of demand when the price of a T-shirt rises from \$5 to \$6 when the  average tourist income is \$20,000.  Also  calculate it when the average tourist income is \$30,000. For each income  category, are t-shirt elastic or inelastic?
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• b) Using the midpoint method, calculate the income elasticity of demand when the average tourist income increases from \$20,000 to \$30,000 when the price of a T-shirt is \$4.  Also calculate it when the price is \$7.
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• c) Are t-shirts a normal or inferior good?

Apr 01 2020 View more View Less