Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals and demand is .

A) 4.5; elastic
B) -0.5; inelastic
C) -4.5; elastic
D) -9.0; inelastic

Question

Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals ________ and demand is ________.

A) 4.5; elastic
B) -0.5; inelastic
C) -4.5; elastic
D) -9.0; inelastic

Brianna Chaffin · Accepted Answer

Final Answer : C, Explanation :  The price elasticity of demand (PED) is calculated using the midpoint formula: PED = [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Without the specific quantities (Q1 and Q2), we can't calculate the exact number, but the negative sign in the answer indicates a normal inverse relationship between price and quantity demanded, which is typical for PED. The term elastic means that the quantity demanded changes by a greater percentage than the price change, which is consistent with a PED magnitude greater than 1 (ignoring the sign).

Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals and demand is .

A) 4.5; elastic
B) -0.5; inelastic
C) -4.5; elastic
D) -9.0; inelastic

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals ________ and demand is ________.A) 4.5; elasticB) -0.5; inelasticC) -4.5; elasticD) -9.0; inelastic

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $8 to $10, the price elasticity of demand equals and demand is .

A) 4.5; elastic
B) -0.5; inelastic
C) -4.5; elastic
D) -9.0; inelastic