Asked by Kaity Hernandez on Jun 09, 2024
Verified
Refer to Figure 5-1. Between point A and point B, price elasticity of demand is equal to
A) 0.33.
B) 0.67.
C) 1.5.
D) 2.67.
Demand
The quantity of a product or service that consumers are willing and able to purchase at various price levels at a given time.
- Apply the midpoint procedure to evaluate various categories of elasticity, like price elasticity of demand, income elasticity of demand, and cross-price elasticity.
Verified Answer
SK
Simar KandholaJun 12, 2024
Final Answer :
C
Explanation :
Price elasticity of demand between two points is calculated using the midpoint formula, which is the percentage change in quantity demanded divided by the percentage change in price. The correct answer, 1.5, suggests a relatively elastic demand between points A and B, meaning the quantity demanded changes by a greater percentage than the price does.
Learning Objectives
- Apply the midpoint procedure to evaluate various categories of elasticity, like price elasticity of demand, income elasticity of demand, and cross-price elasticity.