The current equilibrium price in the market is $12.50, while the equilibrium quantity is 7,500 units. Suppose the government places a $5 per unit tax on the market, leading to a new equilibrium demanded price of $15 and equilibrium quantity of 5,000 units. Using the midpoint method, the price elasticity of demand will be
A) 0.46.
B) 1.8.
C) 1.01.
D) 2.2.

Question

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The Answer of The current equilibrium price in the market is $12.50, while the equilibrium quantity is 7,500 units. Suppose the government places a $5 per unit tax on the market, leading to a new equilibrium demanded price of $15 and equilibrium quantity of 5,000 units. Using the midpoint method, the price elasticity of demand will be
A) 0.46.
B) 1.8.
C) 1.01.
D) 2.2.

The Current Equilibrium Price in the Market Is $12