Answer:
55.58
Explanation:
Data provided in the question;
Initial demand per month, Q₁ = 3
Final demand per month, Q₂ = 5
Initial price, P₁ = $33,200
Final price, P₂ = $33,500
Now,
elasticity of demand using midpoint method is calculated as :
= [tex]\frac{\textup{percent change in demand}}{\textup{percent change in supply}}[/tex]
or
= [tex]\frac{\frac{Q_2-Q_1}{\frac{Q_1+Q_2}{2}}}{\frac{P_2-P_1}{\frac{P_1+P_2}{2}}}[/tex]
on substituting the respective values, we get
= [tex]\frac{\frac{5-3}{\frac{5+3}{2}}}{\frac{33,500-33,200}{\frac{33,200+33,500}{2}}}[/tex]
or
= [tex]\frac{\frac{2}{4}}{\frac{300}{\frac{66,700}{2}}}[/tex]
or
= [tex]\frac{0.5}{\frac{300}{33,350}}[/tex]
= 55.58
