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shepuryov [24]
4 years ago
13

Suppose that when the price per ream of recycled printer paper rises from $4 to $4.50, the quantity demanded falls from 800 to 6

00 reams per day. Using the midpoint formula, what is the price elasticity of demand (in absolute value) over this range? Group of answer choices
Business
2 answers:
Butoxors [25]4 years ago
8 0

Answer:

2.43

Explanation:

Given that

P1 = 4

P2 = 4.50

Q1 = 800

Q2 = 600

Recall that

Using midpoint formula

% change in quantity = [Q2 - Q1/(Q2 + Q1) ÷2] × 100

= 600 - 800/600 +800 ÷ 2 × 100

= -200/700 × 100

= 28.57%

% change in price = [P2 - P1/(P2 + P1) ÷ 2] × 100

= 4.50 - 4/4.50 + 4 ÷ 2 × 100

= .50 / 4.25 × 100

= 11.76%

Price elasticity of demand = %change in quantity ÷ % change in price

= 28. 57 ÷ 11.76

= 2.429

= 2.43

Tju [1.3M]4 years ago
7 0

Answer: The answer is -2.42

Explanation:

P1 = $4 Q1 = 800

P2 = $4.50 Q2 = 600

Using the midpoint formula, we have:

For price:

P2 - P1/(P2 + P1)/2

= 4.5 - 4/(4.5 + 4)/2

= 0.5/4.25

= 0.12

For quantity:

Q2 - Q1/(Q2 + Q1)/2

= 600 - 800/(600 + 800)/2

= -200/700

= -0.29

Price elasticity of demand = change in quantity/change in price

= -0.29/0.12

= -2.42.

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