Refer to the Figure Above

Multiple Choice

Refer to the figure above.Over the $5-$6 range,the elasticity of demand using the midpoint formula is:

A) 0.22.
B) 0.88.
C) 1.00.
D) 1.16.
The change in quantity is (60 - 50) /(60 + 50) = 0.091 and the change in price is (5 - 6) /(5 + 6) = 0.091.Thus,elasticity is 0.091/0.091 = 1.0.