Using the Midpoints Formula, What Would Be Price Elasticity of Demand

question 52

Multiple Choice

Using the midpoints formula, what would be price elasticity of demand for a gallbladder operation if the number of operations fell from 6,000 to 4,000 per week after its price increased from $6,000 to $10,000?

• A) 0.25.
• B) 0.50.
• C) 0.80.
• D) 1.25

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Definitions:

Accrued Interest

Accrued interest is interest that has been incurred but not yet paid, often relating to bonds or loans over the period between interest payment dates.

Equity Method

An accounting method in which the investment in common stock is initially recorded at cost, and the investment account is then adjusted annually to show the investor’s equity in the investee.

Stock Investments

Financial assets representing ownership in a company or corporation, typically traded on stock exchanges.

Debt Investments

Financial assets purchased with the expectation that the original funds will be returned over time with interest, typically including bonds or loans.