(Figure: The Demand Curve) Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $3 and $4 is approximately:

A) 0.19.
B) 0.54.
C) 1.00
D) 1.86.

Question

(Figure: The Demand Curve) Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $3 and $4 is approximately:A) 0.19.B) 0.54.C) 1.00D) 1.86.

Arunbir Singh Padda · Accepted Answer

Final Answer : B, Explanation :  To use the midpoint formula, you need to calculate the percentage change in quantity and price first.Percentage change in quantity = [(10-20)/(10+20)/2] * 100% = -33.33%Percentage change in price = [(4-3)/(4+3)/2] * 100% = 14.29%Then the price elasticity of demand is:|-33.33%/14.29%| = 0.54, which is approximately B.

(Figure: The Demand Curve) Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $3 and $4 is approximately:

A) 0.19.
B) 0.54.
C) 1.00
D) 1.86.

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