If at a price of $10, a vendor sells 5 units of a product and at a price of $8, 6 units are sold.Using the midpoint formula, the demand for this good is inelastic.

Question

Quizplus · Accepted Answer

The midpoint formula for elasticity is:E = (Q1 - Q2) / ((Q1 + Q2) / 2) * (P1 - P2) / ((P1 + P2) / 2)where Q1 and P1 are the initial quantity and price, and Q2 and P2 are the new quantity and price.Plugging in the values given in the question, we get:E = (5 - 6) / ((5 + 6) / 2) * (10 - 8) / ((10 + 8) / 2) = -1Since the elasticity is negative, the demand for this good is inelastic.

If at a Price of $10, a Vendor Sells 5