Last year, Alice bought 40 unit of good z when her income was $ 20,000. This year, income increased to $25,000, and she purchased 48 units of good z. using the midpoint method, We can conclude that her income elastic of demand is: A. Alice's price elasticity of demand for unit is equal to 1. B. unit are a normal good. C. Alice's demand for unit is price-inelastic. D. Alice's demand for unit is price-elastic. E. The income elasticity of demand for unit is negative.

The Midpoint Method is a formula to computes the price elasticity of demand by using 2 set points of price and product quantity. The Midpoint Methods computes the percentage changes by dividing the average value of the initial and final values.

Price elasticity of demand = (Q2-Q1)/[(Q2+Q1)/2]

(P2-P1)/[(P2+P1)/2]

Based on the case, we know that:

P1 = $20,000

Q1 = 40

P2 = $25,000

Q2 = 48

The price elasticity of demand for Alice's income is:

Price elasticity of demand = (48-40)/[(48+40)/2

(25,000 - 20,000)/[(25,000 + 20,000)/2]

Price elasticity of demand = 8/44

5,000/22,500

Price elasticity of demand = 0.8

Because the price elasticity of demand for Alice's income is 0.8, we could conclude that Alice's demand for unit is price-elsatic.

Learn more about Midpoint Method here: https://brainly.com/questioon/20412012

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