Suppose that 50 hot dogs are demanded at a particular price.If the price of hot dogs rises from that price by 5 percent,the number of hot dogs demanded falls to 48.Using the midpoint approach to calculate the price elasticity of demand,it follows that the
A)demand for hot dogs in this price range is unit elastic.
B)price increase will decrease the total revenue of hot dog sellers.
C)price elasticity of demand for hot dogs in this price range is about 1.22.
D)price elasticity of demand for hot dogs in this price range is about 0.82.

Question

Quizplus · Accepted Answer

The midpoint formula for elasticity is [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(P2 - P1) / ((P2 + P1) / 2)]. Here, Q1 = 50, Q2 = 48, P1 = 100, P2 = 105. The elasticity is approximately 0.82.

Suppose That 50 Hot Dogs Are Demanded at a Particular