Figure 5-7

-Refer to Figure 5-7. Using the midpoint method, what is the price elasticity of supply between point B and point C?
A)1.44
B)1.29
C)0.96
D)0.69

Question

Figure 5-7
 
-Refer to Figure 5-7. Using the midpoint method, what is the price elasticity of supply between point B and point C?
A)1.44 
B)1.29 
C)0.96 
D)0.69

Quizplus · Accepted Answer

The midpoint method for calculating elasticity is given by the formula [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)], where Q1 and Q2 are the initial and final quantities, and P1 and P2 are the initial and final prices, respectively. Without the specific values from Figure 5-7, the correct answer can't be determined directly from the question. However, given the options and assuming the calculation has been done correctly, an elasticity of 1.44 indicates a relatively elastic supply between points B and C, meaning the percentage change in quantity supplied is greater than the percentage change in price.

Figure 5-7 -Refer to Figure 5-7. Using the Midpoint Method, What Is