Aradhya's demand schedule of ice-cream is given as: Price (RS) Quantity Demanded (Income = Rs. 20000) Quantity Demanded (Income = Rs. 25000) 180 80…
BBS Microeconomics for Business · 2077 · Solved Question with Answer
Aradhya's demand schedule of ice-cream is given as:
| Price (RS) | Quantity Demanded (Income = Rs. 20000) | Quantity Demanded (Income = Rs. 25000) |
| 180 | 80 | 100 |
| 220 | 60 | 80 |
a. Calculate price elasticity of demand of ice-cream for Aaradhya when the price of ice-cream increases from Rs. 180 to Rs. 220 at both income levels Rs. 20,000 and Rs. 25,000.
b. Calculate income elasticity of demand of ice-cream for Aaradhyas income increases from Rs. 20000 to Rs. 25,000 at prices Rs. 180 and Rs. 220.
c. Compare and interpret the above results.