The reason economists use the midpoint method to compute elasticity is that
A) it is the only viable way to measure total revenue.
B) economists want the elasticity to be the same whether the price is increasing or decreasing.
C) it better measures consumers' responsiveness to price changes.
D) it is the only way to avoid always using negative numbers.

Question

Quizplus · Accepted Answer

The midpoint method for computing elasticity is used because it provides a consistent measure of elasticity that is the same whether prices are increasing or decreasing. This method avoids the issue of elasticity values depending on the direction of the price change, making comparisons more straightforward.

The Reason Economists Use the Midpoint Method to Compute Elasticity