-In the Figure Above,using the Midpoint Method,the Price Elasticity of Demand

question 8

Multiple Choice

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $7 to $6 is equal to

• A) 2.50.
• B) 1.63.
• C) 0.40.
• D) 0.62.
• E) 1.00.

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Definitions:

Prices

The amount of money required to purchase a good or service, reflecting its value in a monetary term.

Inflation Rate

The rate at which the overall cost of goods and services rises over a given time frame.

Base Year

A reference year against which economic growth, inflation, or other economic indicators are measured.

Quantities

The amount or number of a material or item measured or produced.