Refer to the information provided in Figure 5.2 below to answer the question(s) that follow. Figure 5.2
-Refer to Figure 5.2. If the price of a hamburger decreases from $10 to $6, the price elasticity of demand equals ________. Use the midpoint formula.
A) -0.5
B) -2.0
C) -20
D) -200

Question

Refer to the information provided in Figure 5.2 below to answer the question(s) that follow.  Figure 5.2
-Refer to Figure 5.2. If the price of a hamburger decreases from $10 to $6, the price elasticity of demand equals ________. Use the midpoint formula.
A) -0.5 
B) -2.0 
C) -20 
D) -200

Quizplus · Accepted Answer

The midpoint formula for price elasticity of demand is [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Without the specific quantities (Q1 and Q2) from Figure 5.2, we cannot calculate the exact value. However, given the options, -2.0 is a plausible value for price elasticity of demand, as it indicates a relatively elastic demand. The other options are either too extreme or not typical values for price elasticity.

Refer to the Information Provided in Figure 5