Figure 5-3

-Refer to Figure 5-3. Using the midpoint method, between prices of $10 and $20, price elasticity of demand is about
A)0.18.
B)0.12.
C)0.67.
D)5.67.

Question

Figure 5-3
  ​
-Refer to Figure 5-3. Using the midpoint method, between prices of $10 and $20, price elasticity of demand is about
A)0.18. 
B)0.12. 
C)0.67. 
D)5.67.

Quizplus · Accepted Answer

The midpoint method for calculating price elasticity of demand is:(Q2 - Q1) / ((Q2 + Q1) / 2) / (P2 - P1) / ((P2 + P1) / 2)Plugging in the values from Figure 5-3, we get:(10 - 20) / ((10 + 20) / 2) / (20 - 10) / ((20 + 10) / 2) = -0.18

Figure 5-3 ​

Figure 5-3