The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under three different scenarios. In scenario D1, Lorena’s income is $50,000 per year and movies cost $9 each. In scenario D2, Lorena’s income is also $50,000 per year, but the price of seeing a movie rises to $11. And in scenario D3, Lorena’s income goes up to $70,000 per year, while movies cost $11.
Scenario: D1 D2 D3
Income per year: $50,000 $50,000 $70,000
Movie Ticket Price: $9 $11 $11
Rounds of Golf: Quantity Demanded Quantity Demanded Quantity Demanded
Price = $50 15 10 15
Price = $35 25 15 30
Price = $20 40 20 50
a. Using the data under D1 and D2, calculate the cross elasticity of Lorena’s demand for golf at all three prices. (To do this, apply the midpoints approach to the cross elasticity of demand.)
Instructions: Round your answer to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.
Cross elasticity of Lorena’s demand at the price of $50
This question was asked on Jan 20, 2013.
Recently Asked Questions
- An effective staffing model should take into account resources such as support personnel, equipment and supplies, as having adequate resources on hand improves
- Hello. I usually get confused between what subsidies and taxes do. If there is a positive externality, the demand shifts up with a subsidy, but when there isnt
- Please refer to the attachment to answer this question. This question was created from Devry ACCT 504 Final Exam December 2016_1.