Question

The Midpoint Formula - Percentage Changes Exercise 1 (Algo 4 The figure below represents the weekly demand for GPS units. .34 oints Demand for GPS Units 220- 200 eBook 160 140 120 100 80 60 40 20 References 0 40 80 120 160 200 240 280 320 360 400 440 Quantity (GPS units) 4.34 points Instructions: Round your answers to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. When going from a price of $120 per unit to a price of $100 per unit, what is the price elasticity of demand for GPS units? b. When going from a price of $100 per unit to a price of $120 per unit, what is the price elasticity of demaná for GPS units? References c. Using the midpoint formula, what is the midpoint price elasticity of demand for GPS units between a price of $120 per unit and a price of $100 per unit? d. When going from a price of $60 per unit to a price of $40 per unit, what is the price elasticity of demand for GPS units? e. When going from a price of $40 per unit to a price of $60 per unit, what is the price elasticity of demand for GPS units? t Using the midpoint formula, what is the midpoint price elasticity of demand for GPS units between a price of $40 per unit and a price of $60 per unit?

Answer 1

A.

Price elasticity of demand = % change in quantity demanded / % change in price

Price elasticity of demand = ((200-160)/160)/((100-120)/120)

Price elasticity of demand = -1.5

B.

Price elasticity of demand = ((160-200)/200)/((120-100)/100)

Price elasticity of demand = -1

C.

Price elasticity of demand = ((160-200)/(200+160)/2)/((120-100)/(100+120)/2)

Price elasticity of demand = -1.22

D.

Price elasticity of demand = ((320-280)/280)/((40-60)/60)

Price elasticity of demand = -.43

E.

Price elasticity of demand = ((280-320)/320)/((60-40)/40)

Price elasticity of demand = -.25

F

Price elasticity of demand = ((280-320)/(320+280)/2)/((60-40)/(40+60)/2)

Price elasticity of demand = -.33