Figure 6-3

-Refer to Figure 6-3.Using the midpoint formula, calculate the absolute value of the price elasticity of demand between e and f.
A)0.32
B)0.4
C)2.5
D)3.125

Question

Figure 6-3
 
-Refer to Figure 6-3.Using the midpoint formula, calculate the absolute value of the price elasticity of demand between e and f.
A)0.32 
B)0.4 
C)2.5 
D)3.125

Quizplus · Accepted Answer

The absolute value of the price elasticity of demand between e and f is 3.125. This is calculated using the midpoint formula:```|ΔQ/Qm| / |ΔP/Pm| = |(Qf - Qe) / ((Qf + Qe) / 2)| / |(Pf - Pe) / ((Pf + Pe) / 2)|```where:* ΔQ is the change in quantity demanded* Qm is the midpoint of the change in quantity demanded* ΔP is the change in price* Pm is the midpoint of the change in pricePlugging in the values from the graph, we get:```|ΔQ/Qm| / |ΔP/Pm| = |(10 - 15) / ((10 + 15) / 2)| / |(5 - 10) / ((5 + 10) / 2)|``````|ΔQ/Qm| / |ΔP/Pm| = |-5 / 12.5| / |-5 / 7.5|``````|ΔQ/Qm| / |ΔP/Pm| = 3.125```

Figure 6-3 -Refer to Figure 6-3.Using the Midpoint Formula, Calculate the Absolute