(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $1.25 and $1.00?

A) 0.60
B) 0.82
C) 1.00
D) 1.60

Question

(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $1.25 and $1.00?A) 0.60B) 0.82C) 1.00D) 1.60

Sommer Tominello · Accepted Answer

Final Answer : B, Explanation :  Using the midpoint formula:Ep = ((Q2-Q1)/((Q2+Q1)/2))/((P2-P1)/((P2+P1)/2))Ep = ((400-500)/((400+500)/2))/((1.25-1.00)/((1.25+1.00)/2)) = -0.82/0.25 = -3.28Absolute value of price elasticity of demand is 3.28. Since it is greater than 1, demand is elastic. Therefore, the price elasticity of demand between $1.25 and $1.00 is 0.82.

(Table: Price Elasticity) Use Table: Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $1.25 and $1.00?

A) 0.60
B) 0.82
C) 1.00
D) 1.60

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