The
Explanation of Solution
By using the midpoint method, the price elasticity of demand between point C and E would be:
It is greater than 1 and economists would classify it as elastic.
Therefore, the correct option is b (1.5, elastic).
Introduction:
Elasticity of demand represents the measure of sensitivity of demand to price that shows how change in price or supply of goods affects the quantity demanded.
Midpoint method is used to calculate elasticity by using the average percentage change in quantity and average percentage change in price.
Chapter 9R Solutions
Krugman's Economics For The Ap® Course
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