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Using the midpoint formula for calculating the elasticity of demand, if the price of a good fell from $42 to $38, what would be the elasticity of demand if the quantity demanded changed from: a. $19 to $21? b. $27 to $33? c. $195 to $205?
In the given problem P1 = 42, P2 = 38 Let the quantities be denoted by Q1 & Q2 Elasticity of demand is determined by the formula, e = |(Q2 – Q1) /(P2 – P1) (P1 + P2) /(Q1 + Q2)| a. Q1 = 19 & Q2 = 21 e = |(21-19)/(38-42) (42+38)/(19+21)| e = |2/(-4)80/40| e = 1 b



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