What is the income elasticity of demand for mobile service

$10.00

Description

what is the income elasticity of demand for mobile service?

Question

Consider the markets for mobile and landline telephone service. Suppose that when the average income of residents of Plainville is $55,000 per year, the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000. Suppose that when the price of mobile service rises from $100 to $120 per month, the quantity demanded of landline service decreases to 11,000. Suppose also that when the average income increases to $60,000, the quantity demanded of mobile service increases to 33,000.

Considering the income elasticity, what type of good is mobile telephone service?

Using the midpoint method, what is the income elasticity of demand for mobile service?

Reviews

There are no reviews yet.

Be the first to review “What is the income elasticity of demand for mobile service”

Your email address will not be published. Required fields are marked *