The Current Equilibrium Price in the Market Is $12

Multiple Choice

The current equilibrium price in the market is $12.50, while the equilibrium quantity is 7,500 units. Suppose the government places a $5 per unit tax on the market, leading to a new equilibrium demanded price of $15 and equilibrium quantity of 5,000 units. Using the midpoint method, the price elasticity of demand will be

A) 0.46.
B) 1.8.
C) 1.01.
D) 2.2.