BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

Solutions

Chapter
Section
BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

The price of a good rises from $8 to $12, and the quantity demanded falls from 110 to 90 units. Calculated with the midpoint method, the price elasticity of demand is

a. 1/5.

b. 1/2.

c. 2.

d. 5.

To determine
The measuring price elasticity of demand.

Explanation

Option (b):

By midpoint method; the price elasticity of demand occurs when the price of a good rises from $8 to $12, and the quantity demanded falls from 110 to 90 units is calculated as follows:

Price elasticity of demand=(11090)((110+90)2)÷(128)((12+8)2)=20100÷410=0.20.4=12

The price elasticity of demand is 0

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Describe marketing uses of branding

MKTG 12:STUDENT ED.-TEXT

How should the capital structure weights used to calculate the WACC be determined?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)