Suppose when the price of a can of tuna is $1,the quantity demanded is 250,and when the price is $2,the quantity demanded is 100.Using the mid-point method,the price elasticity of demand is:
A)1.28.
B)0.78.
C)128 percent.
D)78 percent.

Question

Quizplus · Accepted Answer

The price elasticity of demand using the midpoint method is calculated as: [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(P2 - P1) / ((P2 + P1) / 2)]. Substituting the given values: [(100 - 250) / (100 + 250) / 2] / [(2 - 1) / (2 + 1) / 2] = (-150 / 175) / (1 / 1.5) = -0.857 / 0.667 = -1.28. The absolute value is 1.28.

Suppose When the Price of a Can of Tuna Is