Question

The price for a fidget spinner is $5 with the quantity demanded at 7,000 a day. As time goes on the price for a fidget spinner drops to $3 and the quantity demanded increases to 12,500 a day. What is the price elasticity of demand for fidget spinners using the midpoint method? Group of answer choices

Answer 1

Answer:

Price elasticity of demand using midpoint method is -1.1282

Explanation:

Formula of price elasticity of demand using midpoint method is as follows:

Price elasticity of demand = (Change in Demand / Average of demands) / (Change in Price / Average of Prices)

Price elasticity of demand = ( 12,500 - 7,000 ) / [( 12500 + 7000 ) /2 ] / ( 3 - 5 )/[( 3 + 5 ) /2]

Price elasticity of demand = (5500 / 9750) / ( -2 / 4)

Price elasticity of demand = 0.5641 / -0.5

Price elasticity of demand = -1.1282