How is income elasticity calculated?
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How is cross price elasticity calculated?
How is price elasticity of demand calculated ?
Please show the work:
1- Suppose price elasticity of demand of a pizza at the local pizza restaurant is setimated to be 4. by how much does the quantity of pizza sold change if the shop raises the price of pizza by 5%?
2- Suppose a local clothing estimates that the income of its customers has increased by 16%. This clothing store calculated income elasticity of demand to be 1.2. how much should the quantity demanded of clothes change based on this infomation? what does the income elasticity tell you about the goods this clothing store is selling?