Suppose when the price of mascara is $12,the quantity demanded is 400,and when the price is $8,the quantity demanded is 500.Using the mid-point method,the price elasticity of demand is:
A)0.56.
B)1.8.
C)56.
D)180.

Question

Quizplus · Accepted Answer

The mid-point method for calculating price elasticity of demand is:Ed = (% Change in Quantity Demanded) / (% Change in Price)% Change in Quantity Demanded = (500 - 400) / ((500 + 400) / 2) = 100 / 450 = 0.2222% Change in Price = (8 - 12) / ((8 + 12) / 2) = -4 / 10 = -0.4Ed = 0.2222 / -0.4 = 0.56

Suppose When the Price of Mascara Is $12,the Quantity Demanded