Question

The data in the table shows the price and quantity supplied for exercise balls. Using the Midpoint Method, what is the price elasticity of supply from point C to point D? Note: Remember to take the absolute value of the result and round to the nearest hundredth. If using a calculator, rounding should be done at the end of your calculation Point Price Quantity А $30 10,000 B $32 10,100 $34 10,200 $36 10,300 E $38 10,040 Provide your answer below:

Answer 1

Ans: The price elasticity of supply from point C to point D is 0.17

Explanation:

Initial price ( P1) = $34

New price ( P2) = $36

Initial quantity = 10,200

New quantity = 10,300

PES = ∆Q/∆P *( P1 + P2 / Q1 + Q2)

= {( 10,300 - 10,200 ) / ( 36 -34 ) } * {( 34 + 36 ) /( 10,200 + 10,300)}

= ( 100 / 2 ) * ( 70 / 20,500)

= 50 * 0.0034

= 0.17