Figure 5-16
-Refer to Figure 5-16.Using the midpoint method,what is the price elasticity of supply between $6 and $8?
A)0.86
B)1.00
C)1.17
D)1.25

Question

Figure 5-16 
-Refer to Figure 5-16.Using the midpoint method,what is the price elasticity of supply between $6 and $8?
A)0.86 
B)1.00 
C)1.17 
D)1.25

Quizplus · Accepted Answer

Using the midpoint method formula, we have:

Price elasticity of supply = [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(P2 - P1) / ((P2 + P1) / 2)]

= [(30 - 20) / ((30 + 20) / 2)] / [(8 - 6) / ((8 + 6) / 2)]

= 10 / 25 * 7 / 2

= 1.17

Therefore, the price elasticity of supply between $6 and $8 is 1.17. The correct choice is C.

Figure 5-16 -Refer to Figure 5-16.Using the Midpoint Method,what Is the Price