How to define the price elasticity of the demand curve at a point using the average...

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Question

How to define the price elasticity of the demand curve at a point using the average price

Answer 1

Answer #1

Arc elasticity or midpoint elasticity: It is the degree of responsiveness to change in quantity demanded due to change in the price of the good.

E = [Change in quantity demanded / Change in price of the good] x [Average price / average quantity]

Where average price = (P0 + P1) / 2

Where average quantity = (Q0 + Q1) / 2

Answer 2

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