Question

b. Using the midpoint method, what is the price elasticity of demand from a price of $3.00 to a price of $2.00 per pack of 100 screws?

Answer 1

Answer:
-1
Demand = (360 - 240)/((360 + 240)/2) = 120/(600/2) = 120/300 = 0.4.
Price = (2 - 3)/((2 + 3)/2) = -1/(5/2) = -1/2.5 = -0.4
0.4/-0.4 = -1.