We Use the Midpoint Formula in Computing the Price Elasticity

question 193

Multiple Choice

We use the midpoint formula in computing the price elasticity of demand coefficient in order to

• A)make the coefficient value become independent of whether price goes up or down.
• B)convert absolute changes into percentage changes.
• C)eliminate the negative sign of the coefficient.
• D)make the coefficient become equal to the slope of the demand curve.

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Definitions:

Sample Size

The number of observations or individuals taken from a population for the purpose of statistical analysis.

Sample Proportion

The sample proportion is a statistic that estimates the proportion of elements in a sample that have a particular attribute, characteristic, or outcome.

Acceptable Error

The margin of error or deviation from a standard value that is deemed tolerable within specific contexts, such as measurements or quality control.

Confidence

A measure of the degree to which one is certain about a particular prediction or outcome.