Question

Supply of Children's Books Price (dollars) Quantity (books) $12 24 10 20 8 16 6 12 4 8 2 4 0 0 Instructions: Round your answers to 2 decimal places. a. Using the midpoint method, what is the percentage change in price from a price of $4 to a price of $6 per children's book

Answer 1

Answer:

40%

Explanation:

the percentage change in price using the midpoint method = {(P₂ - P₁) / [(P₂ + P₁)/2]} x 100

= {($6- $4) / [($6 + $4)/2]} x 100 = [$2 / ($10 / 2)] x 100 = ($2 / $5) x 100 = 0.4 x 100 = 40%

The advantage of using the midpoint method for calculating percentage changes is that it doesn't matter if the change is positive or negative, e.g. it will yield the same result if the price increases or decreases in the same amounts.