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-(Figure: The Demand Curve)Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $6 and $8 is approximately:
A)0.23.
B)0.45.
C)2.33.
D)4.50.

Question

Use the following to answer question: 
-(Figure: The Demand Curve)Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $6 and $8 is approximately:
A)0.23. 
B)0.45. 
C)2.33. 
D)4.50.

Quizplus · Accepted Answer

The midpoint method for calculating elasticity is given by the formula: $E_d = \frac{\%\Delta Q}{\%\Delta P}$, where $\%\Delta Q$ is the percentage change in quantity demanded, and $\%\Delta P$ is the percentage change in price. Without the specific quantities from the figure, we can't calculate the exact numbers, but the midpoint method is designed to give a more accurate measure of elasticity over a range of prices. An elasticity of 2.33 suggests a relatively elastic demand, where a price change leads to a more than proportionate change in quantity demanded, which is plausible for many goods in the range of prices given.

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