Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.

-Refer to Figure 5-8.Using the midpoint method,between prices of $12 and $18,price elasticity of demand is

Question

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.
 
-Refer to Figure 5-8.Using the midpoint method,between prices of $12 and $18,price elasticity of demand is

Quizplus · Accepted Answer

The midpoint method is used to calculate the price elasticity of demand between two points on a demand curve. The formula for the midpoint method is:```Price elasticity of demand = (Percentage change in quantity demanded) / (Percentage change in price)```In this case, the percentage change in quantity demanded is:```(100 - 80) / 80 = 0.25```And the percentage change in price is:```(18 - 12) / 12 = 0.5```Therefore, the price elasticity of demand between prices of $12 and $18 is:```0.25 / 0.5 = 0.5```So the correct answer is A) 0.5.