Question

1.The price of a large pizza decreased from $19.00 to $15.00. As a result, the quantity demanded of skateboards increased from 240.00 to 260.00.

2.Using the midpoint formula, what is the percentage change observed for the price of a large pizza? Give your answer to two decimal places.

3. Using the midpoint formula, what is the percentage change observed for the quantity demanded of skateboards? Give your answer to two decimal places.

Answer 1

(2)

Formula :

Using Mid point method % change in X is given by :

% change in X = ((X_n - X_o)/((X_n + X_o)/2))*100

where X_n = New X and X_o = Old X (or initial X)

Hence, % change in Price = ((P_n - P_o)/((P_n + P_o)/2))*100

where P_n = New Price = 15 and P_o = Old Price = 19

Hence, % change in Price = ((15 - 19)/((19 + 15)/2))*100 = -23.53%.

Hence, Using the midpoint formula, the percentage change observed for the price of Pizza = -23.53%(where negative sign suggest that price decreases)

(3)

% change in Quantity demand = ((Q_n - Q_o)/((Q_n + Q_o)/2))*100

where Q_n = New Quantity demand = 260 and Q_o = Old Quantity demand = 240

Hence, % change in Quantity demand = ((260 - 240)/((260 + 240)/2))*100 = 8%.

Hence, Using the midpoint formula, the percentage change observed for the quantity demanded of skateboards = 8%