Question

Paragraph Use the following to answer questions 8-9: Price of a jar of honey Quantity of hooey (in millions of jars) $2 10 S. (Table) According to the table and using the aidpoint method, what is the price elasticity of honey wben the price of a jar of honey is between $2 and $4 ) 0.33 B) 3.0 C) 0.5 D) 1.00 9. A poultry rancher discovered that when she increased the price of organic eggs from S0.75 to $1.00 per dozen, the sales of her eggs fell from 300 dozen per week to 200 dozen per week. Her price elasticity of demand (using the midpoint method) would be: A) 2.60. B) 1.40. C) 0.75. D) 2.40.

Answer 1

8)

Mid point = (Qn -Q) / Qn+Q/2 / P1-P0) /P1+P0/2

= 2 / 9 / 2/3

= 6/18

= 0.33

Answer: (A)

9)

Mid point Elasticity = 100 / 250/ 0.25 /0.87

= 1.39

Right Answer ( B)