Figure 5-13

-Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between $16 and $40?
A) 0.125
B) 0.86
C) 1.0
D) 2.5

Question

Figure 5-13
 
-Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between $16 and $40?
A) 0.125 
B) 0.86 
C) 1.0 
D) 2.5

Quizplus · Accepted Answer

The midpoint method calculates the price elasticity of supply as the percentage change in quantity supplied divided by the percentage change in price. Between $16 and $40, the percentage change in price is (40-16)/((40+16)/2) = 1.5, and the percentage change in quantity supplied is the same, making the elasticity 1.0.

Figure 5-13 -Refer to Figure 5-13.Using the Midpoint Method,what Is the Price