Suppose a decrease in price increases quantity demanded from 8 to 12 units. Using the mid-point formula, what is the percentage change in quantity demanded?
A) 0.1 = 10 percent
B) 40 = 400 percent
C) 0.40 = 40 percent
D) −0.40 = −40 percent

Question

Quizplus · Accepted Answer

The midpoint formula for calculating the percentage change in quantity demanded is:
(Change in Quantity Demanded / Average Quantity Demanded) x100%

Using the information given:
Change in Quantity Demanded = 12 - 8 = 4
Average Quantity Demanded = (8 + 12) / 2 = 10

Plugging in these values:
(4 / 10) x100% = 40%

Therefore, the percentage change in quantity demanded is 40%, making option C the correct answer.

Suppose a Decrease in Price Increases Quantity Demanded from 8