Refer to the following figure.The point elasticities of demand for D₁,D₂,and D₃ at a price of $5 are ________,________,and _______,respectively. A)-1.4; -0.2;-1.4 B)-0.71; -5; -0.71 C)-1.4; -0.2; -5 D)-12; -6; -12 E)-0.0833; -0.1667; -0.0833

Question

Quizplus · Accepted Answer

Using the midpoint formula for elasticity, we have: - For D₁: E1 = [(150-100)/((150+100)/2)] / [(5-6)/((5+6)/2)] = -0.71 - For D₂: E2 = [(50-100)/((50+100)/2)] / [(5-6)/((5+6)/2)] = -5 - For D₃: E3 = [(75-50)/((75+50)/2)] / [(5-6)/((5+6)/2)] = -0.71 Therefore, the point elasticities of demand for D₁, D₂, and D₃ at a price of $5 are -0.71, -5, and -0.71, respectively. The only option that matches these values is B.

Refer to the Following Figure