Asked by Kanidra Stringer on Jun 18, 2024
Verified
Suppose the price of e-books is initially $20 but decreases to $15.The absolute value of the percentage change in price (by the midpoint method) is approximately _____%.
A) 28
B) 10
C) 5
D) 15
Midpoint Method
The midpoint method is a technique used in economics to calculate the elasticity of a variable with respect to another, using the midpoint between two points on a curve to avoid bias from using either endpoint.
Absolute Value
A numerical value without regard to its sign, symbolized as |x|, representing the distance of a number on the number line from the origin.
Percentage Change
Percentage change is a mathematical calculation that shows how much a specific number has increased or decreased, expressed as a percentage of its previous value.
- Employ the midpoint approach for the computation of elasticity variations.
Verified Answer
MG
Martha GarciaJun 24, 2024
Final Answer :
A
Explanation :
The midpoint method for calculating percentage change uses the formula: [(New Value - Old Value) / ((New Value + Old Value) / 2)] * 100. Here, it's [(15 - 20) / ((15 + 20) / 2)] * 100 = (-5 / 17.5) * 100 ≈ -28.57%. The absolute value is approximately 28%.
Learning Objectives
- Employ the midpoint approach for the computation of elasticity variations.