Figure 5-10

-Refer to Figure 5-10.The price elasticity of supply between point A and point B,using the midpoint method,is approximately
A)0.58.
B)0.71.
C)1.06.
D)1.4.

Question

Figure 5-10
 
-Refer to Figure 5-10.The price elasticity of supply between point A and point B,using the midpoint method,is approximately
A)0.58. 
B)0.71. 
C)1.06. 
D)1.4.

Quizplus · Accepted Answer

Using the midpoint method, we can calculate the price elasticity of supply as the percentage change in quantity supplied divided by the percentage change in price:
Elasticity = [(ΔQ/Q)/((ΔP/P)/2)]
Between point A and B, the change in quantity supplied is 10 - 5 = 5 units, and the change in price is $6 - $4 = $2. Using the midpoint formula, we find:
Elasticity = [(5/7.5)/((2/5)/2)] = 0.71
Therefore, the price elasticity of supply between point A and point B, using the midpoint method, is approximately 0.71.

Figure 5-10 -Refer to Figure 5-10.The Price Elasticity of Supply Between Point