-Figure 5-1 shows the prices of two services offered by Earl's Barber Shop and the resulting quantities demanded by customers.In this example,the price elasticity of demand for haircuts (using the midpoint formula)is
A)1
B)1.8
C)3.5
D)2.25
E)0.5

Question

-Figure 5-1 shows the prices of two services offered by Earl's Barber Shop and the resulting quantities demanded by customers.In this example,the price elasticity of demand for haircuts (using the midpoint formula)is
A)1 
B)1.8 
C)3.5 
D)2.25 
E)0.5

Quizplus · Accepted Answer

The price elasticity of demand using the midpoint formula is calculated as the percentage change in quantity demanded divided by the percentage change in price. The given choice B (1.8) is the correct elasticity value calculated using this method.

-Figure 5-1 Shows the Prices of Two Services Offered by Earl's