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Figure: The Demand Curve
-(Figure: The Demand Curve) Look at the figure The Demand Curve. By the midpoint method, the price elasticity of demand between $6 and $8 is approximately:
A) 0.23.
B) 0.45.
C) 2.33.
D) 4.50.

Question

Use the following to answer questions:
Figure: The Demand Curve 
-(Figure: The Demand Curve) Look at the figure The Demand Curve. By the midpoint method, the price elasticity of demand between $6 and $8 is approximately:
A) 0.23. 
B) 0.45. 
C) 2.33. 
D) 4.50.

Quizplus · Accepted Answer

The midpoint method calculates elasticity using the average of the starting and ending prices and quantities. The formula is [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Applying this to the given prices, the elasticity is approximately 2.33.

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