Suppose at a price of $10 the quantity demanded is 100.When the price falls to $8, the quantity demanded increases to 130.The price elasticity of demand (using the midpoint formula) between the prices of $10 and $8 is approximately:
A)1.17.
B)1.50.
C)0.85.
D)1.00.

Question

Quizplus · Accepted Answer

The price elasticity of demand using the midpoint formula is calculated as: [(130 - 100) / ((130 + 100) / 2)] / [(8 - 10) / ((8 + 10) / 2)] = 30/115 / -2/9 = 1.17.

Suppose at a Price of $10 the Quantity Demanded Is