Calculation of
Explanation of Solution
The midpoint formula for calculating
Nominator of the equation is the percentage changes in quantity demanded, and denominator is the percentage changes in price. Substitute the respective values in Equation (1) to calculate the price elasticity of demand, which is equal between points A and B.
Price elasticity of demand is 1.22.
Price elasticity of demand: Price elasticity of demand shows the responsiveness of quantity demand due to a change in price.
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Chapter 20 Solutions
Economics (Book Only)
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