Table 5-5 The Following Table Shows a Portion of the Demand Schedule

question 325

Multiple Choice

Table 5-5
The following table shows a portion of the demand schedule for a particular good at various levels of income.

-Refer to Table 5-5.Using the midpoint method,at a price of $12,what is the income elasticity of demand when income rises from $5,000 to $10,000?

• A) 0.00
• B) 0.41
• C) 1.00
• D) 2.45

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Definitions:

Monopolistic Competition

The market structure that exists when there are fewer businesses than in a pure-competition environment and the differences among the goods they sell are small.

Competitive Environment

The dynamic external system in which businesses compete for resources, customers, and market space.

Pure Competition

The market structure that exists when there are many small businesses selling one standardized product.