The Midpoint Formula Is Used to Measure the Elasticity of Demand

question 157

Multiple Choice

The midpoint formula is used to measure the elasticity of demand between two points on a demand curve

• A)when demand is elastic.
• B)in special cases when the percentage change in the quantity demanded is equal to the percentage change in price.
• C)to ensure that the elasticity has a negative value.
• D)to ensure that we have only one value of the price elasticity of demand between two points on a demand curve.

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Definitions:

Interest Annually

The payment received or paid out for the use of money on a yearly basis.

Principal Due

The amount of the original loan or bond issue that is still owed, excluding interest payments.

Discount Rate

The interest rate used to discount future cash flows to their present value, important in the evaluation of investment opportunities.

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Regular payments made over a period of time, often associated with loans or leases.