The mid-point method of calculating elasticity:
A)measures the percentage change relative to a point midway between the two points.
B)measures the absolute change relative to a point midway between the two points.
C)measures the percentage change relative to a point midway between demand and supply.
D)None of these is true.

Question

Quizplus · Accepted Answer

The mid-point method of calculating elasticity measures the percentage change in quantity demanded or supplied relative to a point midway between the initial and final prices or quantities. This is done to avoid the bias that can result from using different reference points for measuring percentage changes.

The Mid-Point Method of Calculating Elasticity