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Unformatted text preview: • Income Elasticity of demand: – Percentage change in quantity demanded due to a 1% change in income. Group Problem • Two groups of demand: • Graph and provide the formula for market demand. • Where does the elasticity of market demand = 1? } , 4 100 max{ } , 200 max{ p q p q o b== Group Problem • University football tickets are sold to maximize revenue. There are 100,000 seats. Demand is: 1.Calculate the revenue maximizing price and quantity. What is the elasticity of demand at this point? 2.Redo the problem when demand increases to: p p D 000 , 10 000 , 200 ) (= p p D 000 , 10 000 , 300 ) (=...
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This note was uploaded on 06/16/2011 for the course ECON 321 taught by Professor Murray during the Spring '11 term at South Carolina.
 Spring '11
 MURRAY

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