To answer the question,refer to the following table showing a demand schedule: If price falls from $200 to $150,what is the elasticity of demand over this range?
A)-0.62
B)-1.0
C)-1.17
D)-2.5
E)-3.0

Question

To answer the question,refer to the following table showing a demand schedule:  If price falls from $200 to $150,what is the elasticity of demand over this range?
A)-0.62 
B)-1.0 
C)-1.17 
D)-2.5 
E)-3.0

Quizplus · Accepted Answer

Using the midpoint formula for elasticity of demand:
E = ((Q2-Q1)/(Q2+Q1)/2) / ((P2-P1)/(P2+P1)/2)
For the range from $200 to $150, Q1 = 200 and Q2 = 300, P1 = 200 and P2 = 150
E = ((300-200)/(250)/2) / ((150-200)/(175)/2)
E = 1.17
Therefore, the elasticity of demand over this range is 1.17, which corresponds to choice C.

To Answer the Question,refer to the Following Table Showing a Demand