Figure 5-1

-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.

Question

Figure 5-1
 
-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.

Quizplus · Accepted Answer

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.

Figure 5-1 -Refer to Figure 5-1. Between Point a and Point B