The mid-point method of calculating elasticity is typically used because:
A) it is easier to calculate.
B) it is universally understood by all economists.
C) the negative sign can then be ignored.
D) it is a consistent way to estimate the elasticity of demand between two points on a demand curve, regardless of the direction of the movement.

Question

Quizplus · Accepted Answer

The mid-point method is a consistent way to estimate elasticity between two points on a demand curve, regardless of the direction of movement. This makes it a preferred method for economists to use. The method has the added advantage that it produces the same result regardless of which one of the two points is taken as the starting point. Additionally, it overcomes the problem of division by zero that is found when calculating elasticity in the traditional way.

The Mid-Point Method of Calculating Elasticity Is Typically Used Because