Question

Nicolette raised her quantity demanded of hockey pucks from 100 to 150 when the price fell from $5 to $3 per puck. using the midpoint method, her price elasticity of demand is

Answer 1

By definition we have to:
PED = ((Q2-Q1) ÷ (Q2 + Q1) / 2) / ((P2-P1) ÷ (P2 + P1) / 2)
P1 = Price Point 1
Q1 = Quantity Point 1
P2 = Price Point 2
Q2 = Quantity Point 2
Substituting the values we have:
PED = ((150-100) ÷ (150 + 100) / 2)/((3-5) ÷ (3 + 5) / 2)
PED = -0.8
answer:
her price elasticity of demand is -0.8