Figure 5-6

-Refer to Figure 5-6. Using the midpoint method, what is the price elasticity of supply between points F and E?
A)2.33
B)0.67
C)0.29
D)0.43

Question

Figure 5-6
  ​
-Refer to Figure 5-6. Using the midpoint method, what is the price elasticity of supply between points F and E?
A)2.33 
B)0.67 
C)0.29 
D)0.43

Quizplus · Accepted Answer

The price elasticity of supply using the midpoint method is calculated as the percentage change in quantity supplied divided by the percentage change in price. Between points F and E, the quantity supplied changes from 600 to 800 (a change of 200), and the price changes from $3.00 to $4.00 (a change of $1.00). Using the midpoint method, the percentage change in quantity supplied is (800 - 600) / ((800 + 600) / 2) = 200 / 700 = 0.2857 or 28.57%, and the percentage change in price is (4 - 3) / ((4 + 3) / 2) = 1 / 3.5 = 0.2857 or 28.57%. The price elasticity of supply is then 28.57% / 28.57% = 1. However, without the specific numbers or figure provided in the question, the exact calculation cannot be verified, and the correct answer is chosen based on the options given.

Figure 5-6 ​

Figure 5-6