Consider the market for a new DVD movie, where the price is initially $12 and 36
ID: 1138834 • Letter: C
Question
Consider the market for a new DVD movie, where the price is initially $12 and 36 copies are sold per day at a superstore, as indicated in the figure to the right. The superstore is considering lowering the price to $8 What is the price elasticity of demand between these two prices (use the Midpoint 28 Xi 24 22. 20 18 16 14 9 12 Formula)? The price elasticity of demand isEnter your response as a real number rounded to two decimal places.) 10 2 0 48 12 16 20 24 28 32 36 40 44 48 52 56 60 Quantity (copies per day)Explanation / Answer
Given Q1=36,P1=$12
Q2=44,P2=$8
BY USING PRICE ELASTICITY (MID POINT FORMULA)
PRICE ELASICITY=Q2-Q1÷(Q2+Q1)÷2/P2-P1÷(P1+P2)÷2
=44-36÷(36+44)÷2/8-12÷(12+8)÷2
=8÷80÷2/-4÷20÷2
=8÷4×1÷-4=-1/2=-0.5