The price elasticity of demand (based on the midpoint formula) when price increases from $10 to $12 is:______
1 answer:
Answer:
the price elasticity of demand is 1
Explanation:
The price elasticity of the demand using mid point formula is as follows:
Price elasticity of the demand is
= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of quantity demanded)
where,
Change in quantity demanded is
= Q2 - Q1
= 36 - 30
= 6
And, average of quantity demanded is
= (36 + 30) ÷ 2
= 33
Change in price is
= P2 - P1
= $12 - $10
= $2
And, the average of price is
= ($12 + $10) ÷ 2
= 11
So, the price elasticity of demand is 1
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Answer:
B. $1,639
Explanation:
To do arbitraje we will ask at Bank A for $0.305
and then bid in Bank B at $0.306
As the transactions has no cost we are doing a profit by using the exchange as they allowed. Doing this procedure will at some point eliminate the difference in exchange rate for these bank as the purchase will rise the ask rate for Bank A and the sale will decrease the bid rate.
Total: 501639,3442622951
The profit will be for: 501,639.34 - 500,000 = 1,639.34