Question

Homework (Ch 05) 3. Using the midpoint method PRICE Dollars per pod which suggests that According to the midpoint method, the price casticity of demand for apples between point between points and 3

Answer 1

Correct answers with explanation are given below:

Acording to mid- print method : price elasticity of semand = Percent change in quanty Percent change in price e Q2-0, x Jou (Qz+Q1)2 & P2 - Pj_ x 100 (P2+P, ) & 2 (from point X toy) Here, Qg = 40 Pg = 5 Qp = 60 P, zu 40-60 xico Price elasticity of demand = (40E60) 2 5-4 X10 (564)=2 = - 40 22.22 = -1,8001 paint Xand painty . Price elasticity of demand between = 1.8 It suggests that demand for apples is elastic between points x andy as it is greater than 1. It means If morease ir price will bring met 1,8% ela decrease in quantity demanded.