3. Ceteris paribus, if the price of a good decreases from $32 to $24, and the quantity demanded of the good increases from 80 to 100, then the price elasticity of demand (using the midpoint method) for that good is: A) B) C) D) Show your work here 0.22. 0.29. 0.78. 1.20. Formula Calculation Answer This good is INELASTIC ELASTIC UNITARY ELASTIC (circle one)
3. Ceteris paribus, if the price of a good decreases from $32 to $24, and the quantity demanded of the good increases from 80 to 100, then the price elasticity of demand (using the midpoint method) for that good is: A) B) C) D) Show your work here 0.22. 0.29. 0.78. 1.20. Formula Calculation Answer This good is INELASTIC ELASTIC UNITARY ELASTIC (circle one)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![**Exercise: Price Elasticity of Demand**
3. Ceteris paribus, if the price of a good decreases from $32 to $24, and the quantity demanded of the good increases from 80 to 100, then the price elasticity of demand (using the midpoint method) for that good is:
- A) 0.22
- B) 0.29
- C) 0.78
- D) 1.20
### Show Your Work Here
| Formula | Calculation | Answer |
|---------|-------------|--------|
| | | |
**This good is**: INELASTIC ELASTIC UNITARY ELASTIC (circle one)
---
### Explanation
**Price Elasticity of Demand Formula (Midpoint Method):**
The price elasticity of demand can be calculated using the midpoint method, which is:
\[
\text{Price Elasticity of Demand} = \frac{\left(\frac{Q_2 - Q_1}{(Q_2 + Q_1)/2}\right)}{\left(\frac{P_2 - P_1}{(P_2 + P_1)/2}\right)}
\]
where:
- \( P_1 \) and \( P_2 \) are the initial and final prices,
- \( Q_1 \) and \( Q_2 \) are the initial and final quantities demanded.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F60ab4a3c-90a5-4741-b5df-57c75fb94bcc%2F29972df2-a0f7-4583-b66b-e06845b4d396%2Fa2hxwqs_processed.png&w=3840&q=75)
Transcribed Image Text:**Exercise: Price Elasticity of Demand**
3. Ceteris paribus, if the price of a good decreases from $32 to $24, and the quantity demanded of the good increases from 80 to 100, then the price elasticity of demand (using the midpoint method) for that good is:
- A) 0.22
- B) 0.29
- C) 0.78
- D) 1.20
### Show Your Work Here
| Formula | Calculation | Answer |
|---------|-------------|--------|
| | | |
**This good is**: INELASTIC ELASTIC UNITARY ELASTIC (circle one)
---
### Explanation
**Price Elasticity of Demand Formula (Midpoint Method):**
The price elasticity of demand can be calculated using the midpoint method, which is:
\[
\text{Price Elasticity of Demand} = \frac{\left(\frac{Q_2 - Q_1}{(Q_2 + Q_1)/2}\right)}{\left(\frac{P_2 - P_1}{(P_2 + P_1)/2}\right)}
\]
where:
- \( P_1 \) and \( P_2 \) are the initial and final prices,
- \( Q_1 \) and \( Q_2 \) are the initial and final quantities demanded.
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