Suppose when the price of a can of tuna is $1.30,the quantity demanded is 9,and when the price is $1.50,the quantity demanded is 7.Using the mid-point method,the price elasticity of demand is:
A) -1.75
B) -0.57
C) 0.57
D) 29 percent

Question

Quizplus · Accepted Answer

The mid-point method for calculating price elasticity of demand is: [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Plugging in the values: [(7 - 9) / (8)] / [(1.50 - 1.30) / (1.40)] = (-2 / 8) / (0.20 / 1.40) = -0.25 / 0.142857 = -1.75.

Suppose When the Price of a Can of Tuna Is