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Figure: The Demand Curve for Oil
-(Figure: The Demand Curve for Oil) Look at the figure The Demand Curve for Oil. The price elasticity of demand between $20 and $21, by the midpoint method, is approximately:
A) 0.21.
B) 0.49.
C) 2.1.
D) 4.9.

Question

Use the following to answer questions:
Figure: The Demand Curve for Oil 
-(Figure: The Demand Curve for Oil) Look at the figure The Demand Curve for Oil. The price elasticity of demand between $20 and $21, by the midpoint method, is approximately:
A) 0.21. 
B) 0.49. 
C) 2.1. 
D) 4.9.

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 - 12) / ((10 + 12) / 2) / (21 - 20) / ((21 + 20) / 2) = -0.21

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