Lake eats two bags of generic potato chips each day. Blake's hourly wage increases from $ 8 $8 to $ 15 $15 , and he decides to stop eating generic chips and instead eats a name-brand potato chip. Use the midpoint method to calculate Blake's income elasticity of demand for generic potato chips. Round your answer to two decimal places

-3.24

Explanation:

Income-elasticity of demand is given as = % change in quantity demanded / % change in income.

Therefore, since Blake stopped eating generic chips, his change in demand of generic chips is given as

0-2 = 2.

Midpoint is (0-2)/2 = -1

Therefore, % change in quantity demanded for generic chips is given as zero, since Blake stopped taking it completely.

Blake's change in income is given as $8 to $15

% change in income = ($15-$8/$8)×100

7/8 × 100

% change in income = 87.5%

Midpoint of income is $8+$15/2 = $11.5

Income elasticity of demand for generic chips would be = -2/0.609 = -3.284 approximately -3.24

Price elasticity= -3.2856~-3.29

Since the negative is usually ignored elasticity is 3.29

Potato chips is an inferior good since Blake decide to stop eating it when he got an income raise.

Explanation:

Price elasticity is defined as a measure of the responsiveness of quantity demanded to changes in price. As a rule as price increases the quantity demanded reduces, and vice versa.

The midpoint for potato chips is (2+0)/2= 1 bag

Change in potato = (New amount-old amount)/ midpoint of potato

Change in potato= (0-2)/1= -2

The midpoint for price= (8+15)/2= 11.5

Change in price= (new price-old price)/midpoint price

Change in price= (15-8)/11.5= 0.6087

Price elasticity= change in quantity/ change in price

Price elasticity= -2/0.6087

Price elasticity= -3.2856

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answer/// equals both average variable cost and average total cost at their respective minimums;