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3 years ago

Using the midpoint formula, calculate elasticity for the following change in demand.

Business

1 answer:

emmainna [20.7K]3 years ago

3 0

Answer:

-2.33

Explanation:

The computation of the price elasticity of demand using mid point formula is shown below:

= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of quantity demanded)

where,

Change in quantity demanded would be

= Q2 - Q1

= 5,000 - 2,500

= 2,500

And, average of quantity demanded would be

= (5,000 + 2,500) ÷ 2

= 3,750

Change in price would be

= P2 - P1

= $0.45 - $0.60

= -$0.15

And, average of price would be

= ($0.45 + $0.60) ÷ 2

= 0.525

So, after solving this, the price is -2.33

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Answer and Explanation:

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