Suppose the price of apples increases from $20 to $28, and in response quantity demanded decreases from 100 to 84. Using the mid-point formula, what is the price elasticity of demand? (Note: your answer should be correct to two decimal places; and be sure to express your answer as a positive number.)
| Price | Quantity Demanded |
| $20 | 100 |
| $28 | 84 |
Price elasticity of demand = % change in Quantity Demanded / % change in Price
% change in Quantity Demanded = Q2 - Q1 / (Q1+Q2/2) x 100
% change in Quantity Demanded = 84 - 100 / (100+84/2) x 100
% change in Quantity Demanded = -16/ 92 x 100
% change in Quantity Demanded = -17.39%
% change in Price = P2 - P1 / (P1+P2/2) x 100
% change in Price = 28 - 20 / (20+28/2) x 100
% change in Price = 8 / 24 x 100
% change in Price = 33.33%
Price elasticity of demand = % change in Quantity Demanded / % change in Price
Price elasticity of demand = -17.39 / 33.33
Price elasticity of demand = 0.52
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