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Using the midpoint method, the price elasticity of demand for pistachios between the price levels of $20 and $28 per ton is:

a) -1.3, elastic
b) 1.3, elastic
c) -0.77, inelastic
d) 0.77, inelastic

User Hild
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1 Answer

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Final answer:

Using the midpoint method, the price elasticity of demand for pistachios was found to be 0.45, indicating inelastic demand between the price levels of $20 and $28 per ton.

Step-by-step explanation:

The main answer is that the price elasticity of demand for pistachios between the given price levels of $20 and $28 per ton is inelastic. This conclusion is drawn using the midpoint method to calculate the price elasticity of demand, which yields a value less than one, indicating inelastic demand. The detailed answer provided includes a calculation of percentage change in price and quantity based on the midpoint formula, which has led to a calculated elasticity of demand of 0.45. This value is considered inelastic because it is below one, and according to the convention, this negative elasticity is expressed as a positive number, for interpretational convenience.

User Lukmo
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