Question

Suppose when the price of coffee beans goes from $1 to $1.20 per pound, production increases from 90 million pounds of coffee beans to 110 million pounds per year. Using the mid-point method, the percentage change in quantity supplied is:_______.

Answer 1

20%

Step-by-step explanation:

to calculate the percentage change in quantity supplied using the midpoint method we can use this formula:

= (Q2 - Q1) / [(Q2 + Q1) / 2] = (110 - 90) / [(110 + 90) / 2] = 20 / (200 / 2) = 20 / 100 = 0.2 or 20%

The midpoint method calculates the percentage change between two points of a curve.

Answer 2

$200,000

Step-by-step explanation:

Suppose when the price of coffee beans goes from $1 to $1.20 per pound, production increases from 90 million pounds of coffee beans to 110 million pounds per year. Using the mid-point method, the percentage change in quantity supplied is $200,000.

The midpoint method is an advancement on the average method by one step.

Rather than calculate change by the difference in two numbers divided by the number before the change, you rather divide by the average of the two numbers i.e. x2 - x1 / [(x2+x1) / 2]

Change in Quantity = 110 - 90 / [(110+90)/2] = 0.2 million which is 200,000