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Suppose that a demand curve exhibits two points. Initially, at price P 0 , the quantity demanded is Q 0 . When price changes to P 1 , quantity demanded is Q 1 . Move the components of the midpoint formula for elasticity of demand to their correct positions.

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Answer and Explanation:

The formula to compute the price elasticity of demand is as follows:

= Percentage change in quantity demanded ÷ percentage change in price

At Price P0, the Quantity demanded is Q0

And,

At Price P1, the Quantity Demanded is Q1

Just like this, it could be computed

[tex]\frac{Q_1 - Q_0}{(Q_1 + Q_0)/2}[/tex] divided by [tex]\frac{P_1 - P_0}{(P_1 + P_0)/2}[/tex]

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