Asked by Anezi Ilene on Jul 16, 2024
Verified
(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $1.50 and $1.25?
A) 1.00
B) 1.22
C) 1.50
D) 1.75
Midpoint Formula
A method used to calculate the elasticity of demand or supply, assessing the percentage change in quantity demanded or supplied relative to the percentage change in price.
Price Elasticity
A measure of how much the quantity demanded of a good or service changes in response to a change in its price.
- Master the concept of price elasticity of demand along with the technique for its calculation with the midpoint formula.
Verified Answer
MA
marcus alexanderJul 20, 2024
Final Answer :
B
Explanation :
Using the midpoint formula, the price elasticity of demand between $1.50 and $1.25 is [(250 - 200)/((250 + 200)/2)] / [(1.50 - 1.25)/((1.50 + 1.25)/2)] = 1.22.
Learning Objectives
- Master the concept of price elasticity of demand along with the technique for its calculation with the midpoint formula.