If the price of DVDs falls from $20 to $12 and the quantity of DVDs supplied decreases from 118,000 to 100,000, using the midpoint formula the elasticity of supply equals

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The elasticity of supply is calculated using the midpoint formula: [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(P2 - P1) / ((P2 + P1) / 2)]. Plugging in the values: [(100,000 - 118,000) / (109,000)] / [($12 - $20) / ($16)] = (-18,000 / 109,000) / (-8 / 16) = 0.33.

If the Price of DVDs Falls from $20 to $12