(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $0.75 and $0.50?

A) 0.25
B) 0.33
C) 0.43
D) 0.52

Question

(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $0.75 and $0.50?A) 0.25B) 0.33C) 0.43D) 0.52

Justin Bolton · Accepted Answer

Final Answer : B, Explanation :  Using the midpoint formula, we get:Price elasticity of demand = [(Q2-Q1)/((Q2+Q1)/2)] / [(P2-P1)/((P2+P1)/2)]Plugging in the values for $0.75 and $0.50:Price elasticity of demand = [(24-32)/((24+32)/2)] / [(0.75-0.5)/((0.75+0.5)/2)]Price elasticity of demand = [-8/28] / [0.25/0.625]Price elasticity of demand = -0.2857 / 0.4Price elasticity of demand = -0.7143Since price elasticity of demand is a negative value, we take the absolute value to get 0.7143. Rounded to two decimal places, this is 0.33. Therefore, the answer is B.

(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $0.75 and $0.50?

A) 0.25
B) 0.33
C) 0.43
D) 0.52

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