Suppose when the price of mascara is $12,the quantity demanded is 450,and when the price is $8,the quantity demanded is 550.Using the mid-point method,the price elasticity of demand is:
A) -0.5
B) -2.0
C) -55
D) -180

Question

Quizplus · Accepted Answer

The price elasticity of demand using the mid-point method is calculated as the percentage change in quantity demanded divided by the percentage change in price. The formula is: [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(P2 - P1) / ((P2 + P1) / 2)]. Plugging in the values: [(550 - 450) / (550 + 450) / 2] / [(8 - 12) / (8 + 12) / 2] = 100 / 500 / -4 / 10 = -0.5.

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