The formula for the arc price elasticity can be written (where $\Delta$Q denotes the change in Q)as: A) $\eta$ = [$\Delta$Q /(Q₁ + Q₂)]/[$\Delta$P/(P₁ + P₂)]. B) $\eta$ = [$\Delta$Q /(Q₁ + Q₂)]/[$\Delta$P/(Q₁ + Q₂)]. C) $\eta$ = [$\Delta$Q /(P₁ + P₂)]/[$\Delta$P/(Q₁ + Q₂)]. D) $\eta$ = [$\Delta$P /(P₁ + P₂)]/[$\Delta$Q/(Q₁ + Q₂)]. E) none of the above.

Question

Quizplus · Accepted Answer

The formula for the arc price elasticity is given by:$\eta$ = [$\Delta$Q /(Q₁ + Q₂)]/[$\Delta$P/(P₁ + P₂)]where $\Delta$Q denotes the change in Q, Q₁ and Q₂ are the initial and final quantities, $\Delta$P denotes the change in P, and P₁ and P₂ are the initial and final prices.

The Formula for the Arc Price Elasticity Can Be Written Δ\DeltaΔ

The Formula for the Arc Price Elasticity Can Be Written $\Delta$