When the price of candy bars is $1.20, the quantity demanded is 490 per day. When the price falls to $1.00, the quantity demanded increases to 500. Given this information and using the midpoint method, we know that the demand for candy bars is

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tutorAnne tutorAnne · Answer 1 · 2021-03-02T02:01:29+01:00

Answer:the demand for candy bar is inelastic since the Price elasticity of demand for candy bar is -1.21

Explanation:

To solve for the price elasticity of demand, using the mid point formulae, we utilize the formula below.

Percentage change in Quantity/ Percentage change in Price

% change in Quantity using the midpoint formula;

(Q2-Q1)/ (Q1+Q2/ 2 )= (500- 400)/ (500+ 400/2)

=100/ 450 =0.22

% Change in Price using midpoint formulae =( P2-P1)/ (P2+P1/2)= (1.00- 1.20)/ (1.00+1.20)/2

-0.2 /1.1= -0.1818

Price elasticity of demand =0.22/ -0.1818 = -1.21

We can Therefore say the demand for candy bar is inelastic

Tundexi Tundexi · Answer 2 · 2021-12-28T14:37:23+01:00

Demand for candy bar is inelastic because the price elasticity of demand for candy bar is -0.111

Price elasticity of demand, using the mid point formulae = {Percentage change in Quantity/ Percentage change in Price}

% change in Quantity = (Q2-Q1) / (Q1+Q2/ 2 )

% change in Quantity = (500- 490) / (500+ 490 /2)

% change in Quantity = 0.0202

% Change in Price = (P2-P1)/ (P2+P1/2)

% Change in Price = (1.00- 1.20)/ (1.00+1.20)/2

% Change in Price = -0.2 / 1.1

% Change in Price = -0.1818

Price elasticity of demand = 0.0202 / -0.1818

Price elasticity of demand = -0.111

Hence, the price elasticity of demand is inelastic.

In conclusion, the demand for candy bar is inelastic because the price elasticity of demand for candy bar is -0.111