Question

Suppose that a demand curve exhibits two points. Initially, at price P 0 , the quantity demanded is Q 0 . When price changes to P 1 , quantity demanded is Q 1 . Move the components of the midpoint formula for elasticity of demand to their correct positions.

Answer 1

Answer and Explanation:

The formula to compute the price elasticity of demand is as follows:

= Percentage change in quantity demanded ÷ percentage change in price

At Price P0, the Quantity demanded is Q0

And,

At Price P1, the Quantity Demanded is Q1

Just like this, it could be computed

`(Q_1 - Q_0)/((Q_1 + Q_0)/2)` divided by
`(P_1 - P_0)/((P_1 + P_0)/2)`