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3. Using the midpoint method
The following graph shows two known points (X and Y) on a demand curve for oranges.
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1. According to the midpoint method, the price elasticity of demand for oranges between point X and point Y is approximately (0.03, 0.05, 0.63, 1.6) , which suggests that the demand for oranges is (elastic, inelastic) between points X and Y.
Demand elasticity is a method to measure the extent to which changes in price impact the quantity required of a product or service. There are many methods of measuring price elasticity, including the middlepoint method and the proportional method.
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