Figure 5-17
-Refer to Figure 5-17.Using the midpoint method,what is the price elasticity of supply between point A and point B?
A)0.4
B)0.6
C)1.67
D)2.16

Question

Figure 5-17 
-Refer to Figure 5-17.Using the midpoint method,what is the price elasticity of supply between point A and point B?
A)0.4 
B)0.6 
C)1.67 
D)2.16

Quizplus · Accepted Answer

Using the midpoint method, the price elasticity of supply between point A and point B can be calculated as:
Elasticity = ((QB - QA) / ((QB + QA) / 2)) / ((PB - PA) / ((PB + PA) / 2))
Substituting the values from the graph, we get:
Elasticity = ((60 - 40) / ((60 + 40) / 2)) / ((6 - 5) / ((6 + 5) / 2))
Elasticity = (20 / 50) / (1 / 5.5) = 1.67 (rounded to two decimal places)
Therefore, the best choice is C.

Figure 5-17 -Refer to Figure 5-17.Using the Midpoint Method,what Is the Price