Use the following to answer question:
-(Figure: The Demand Curve)Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $1 and $2 is approximately:
A)0.18.
B)0.56.
C)1.80.
D)5.67.

Question

Use the following to answer question: 
-(Figure: The Demand Curve)Use Figure: The Demand Curve.By the midpoint method,the price elasticity of demand between $1 and $2 is approximately:
A)0.18. 
B)0.56. 
C)1.80. 
D)5.67.

Quizplus · Accepted Answer

The midpoint method for calculating price elasticity of demand is:(Q2 - Q1) / ((Q2 + Q1) / 2) / (P2 - P1) / ((P2 + P1) / 2)Plugging in the values from the graph, we get:(10 - 20) / ((10 + 20) / 2) / (2 - 1) / ((2 + 1) / 2) = -0.18

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