Question

When the price of a gizmo is $50, 100 gizmos are sold. when the price of gizmos is $60, 120 gizmos are sold. using the midpoint formula, the price elasticity of demand is equal to?

Answer 1

1

Step-by-step explanation:

The Price Elasticity of Demand (PED) oF gizmos using the mid-point formula is calculated in this way:

PED = (Q2-Q1) / [(Q2+Q1)/2] / (P2-P1) / [(P2+P1)/2]

= 120 - 100 / [(120+100)/2] / $60-$50 / [($60+$50)/2]

= 0.18 / 0.18

= 1