# Answer to Question #70551 in Microeconomics for Micheala Ludwick

Question #70551

Suppose that price of a pair of shoes rises from $160 to $180. As a result, there are now 5,800 pairs of shoes demanded versus 7,000 as before.

Calculate price elasticity of demand for these shoes. USE MIDPOINT FORMULA.

Calculate price elasticity of demand for these shoes. USE MIDPOINT FORMULA.

Expert's answer

by definition,

midpoint elasticity = [ (Q2 - Q1)/((Q1 + Q2)/2)] / [ (P2 - P1)/((P1 + P2)/2)]

where Q - quantity demanded and P - price of a pair of shoes.

Using the formula above and the given values we get:

midpoint elasticity = [(5800 - 7000)/((7000 + 5800)/2)] / [($180 - $160)/(($160 + $180)/2)] = -0.1875 / 0.1176 = -1.59

midpoint elasticity = [ (Q2 - Q1)/((Q1 + Q2)/2)] / [ (P2 - P1)/((P1 + P2)/2)]

where Q - quantity demanded and P - price of a pair of shoes.

Using the formula above and the given values we get:

midpoint elasticity = [(5800 - 7000)/((7000 + 5800)/2)] / [($180 - $160)/(($160 + $180)/2)] = -0.1875 / 0.1176 = -1.59

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