To calculate the price elasticity of demand using the midpoint formula, we follow these steps:

1. Identify the initial and final prices and quantities.
- Initial price (P1) = $14
- Final price (P2) = $16
- Initial quantity demanded (Q1) = 24
- Final quantity demanded (Q2) = 20

2. Calculate the percentage change in quantity demanded.
$$
\text{Percentage change in quantity demanded} = \frac{Q2 - Q1}{\frac{Q2 + Q1}{2}} \times 100
$$
$$
= \frac{20 - 24}{\frac{20 + 24}{2}} \times 100
$$
$$
= \frac{-4}{22} \times 100
$$
$$
= -18.18\%
$$

3. Calculate the percentage change in price.
$$
\text{Percentage change in price} = \frac{P2 - P1}{\frac{P2 + P1}{2}} \times 100
$$
$$
= \frac{16 - 14}{\frac{16 + 14}{2}} \times 100
$$
$$
= \frac{2}{15} \times 100
$$
$$
= 13.33\%
$$

4. Calculate the price elasticity of demand.
$$
\text{Price elasticity of demand} = \frac{\text{Percentage change in quantity demanded}}{\text{Percentage change in price}}
$$
$$
= \frac{-18.18\%}{13.33\%}
$$
$$
= -1.36
$$

Therefore, the price elasticity of demand when the price increases from $14 to $16 is approximately -1.37. The correct answer is:

-1.37.

Question

To calculate the price elasticity of demand using the midpoint formula, we follow these steps:

1. Identify the initial and final prices and quantities.
   - Initial price (P1) = $14
   - Final price (P2) = $16
   - Initial quantity demanded (Q1) = 24
   - Final quantity demanded (Q2) = 20

2. Calculate the percentage change in quantity demanded.
   $$
   \text{Percentage change in quantity demanded} = \frac{Q2 - Q1}{\frac{Q2 + Q1}{2}} \times 100
   $$
   $$
   = \frac{20 - 24}{\frac{20 + 24}{2}} \times 100
   $$
   $$
   = \frac{-4}{22} \times 100
   $$
   $$
   = -18.18\%
   $$

3. Calculate the percentage change in price.
   $$
   \text{Percentage change in price} = \frac{P2 - P1}{\frac{P2 + P1}{2}} \times 100
   $$
   $$
   = \frac{16 - 14}{\frac{16 + 14}{2}} \times 100
   $$
   $$
   = \frac{2}{15} \times 100
   $$
   $$
   = 13.33\%
   $$

4. Calculate the price elasticity of demand.
   $$
   \text{Price elasticity of demand} = \frac{\text{Percentage change in quantity demanded}}{\text{Percentage change in price}}
   $$
   $$
   = \frac{-18.18\%}{13.33\%}
   $$
   $$
   = -1.36
   $$

Therefore, the price elasticity of demand when the price increases from $14 to $16 is approximately -1.37. The correct answer is:

-1.37.

Knowee AI · Accepted Answer

To calculate the price elasticity of demand using the midpoint formula, we follow these steps:

1. Identify the initial and final prices and quantities.
   - Initial price (P1) = $14
   - Final price (P2) = $16
   - Initial quantity demanded (Q1) = 24
   - Final quantity demanded (Q2) = 20

2. Calculate the percentage change in quantity demanded.
   $$
   \text{Percentage change in quantity demanded} = \frac{Q2 - Q1}{\frac{Q2 + Q1}{2}} \times 100
   $$
   $$
   = \frac{20 - 24}{\frac{20 + 24}{2}} \times 100
   $$
   $$
   = \frac{-4}{22} \times 100
   $$
   $$
   = -18.18\%
   $$

3. Calculate the percentage change in price.
   $$
   \text{Percentage change in price} = \frac{P2 - P1}{\frac{P2 + P1}{2}} \times 100
   $$
   $$
   = \frac{16 - 14}{\frac{16 + 14}{2}} \times 100
   $$
   $$
   = \frac{2}{15} \times 100
   $$
   $$
   = 13.33\%
   $$

4. Calculate the price elasticity of demand.
   $$
   \text{Price elasticity of demand} = \frac{\text{Percentage change in quantity demanded}}{\text{Percentage change in price}}
   $$
   $$
   = \frac{-18.18\%}{13.33\%}
   $$
   $$
   = -1.36
   $$

Therefore, the price elasticity of demand when the price increases from $14 to $16 is approximately -1.37. The correct answer is:

-1.37.

Use the data in the table below to answer the following question. Price Quantity Demanded$20 1218 1716 2014 2412 3010 368 406 444 48 The price elasticity of demand (based on the midpoint formula) when price increases from $14 to $16 isMultiple Choice-3.29.-1.37.-1.-0.33.

Question

Solution

Similar Questions

Upgrade your grade with Knowee