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When the price of candy bars increased from $0.45 to $0.55, the quantity demanded changed from 21,000 per day to 19,000 per day. In this price range, the price elasticity of demand coefficient (based on the midpoint formula) for candy bars is:________a. -1.b. -2.c. -0.18.d. -0.5.

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hyderali230

Answer:

b. -2

Explanation:

Use following formula to calculate price elasticity of demand

Price Elasticity of demand = Change in Demand Quantity / Change in price

Price Elasticity of demand = (19,000 - 21,000) / (0.55 x 19,000 - 0.45 x 21,000)

Price Elasticity of demand = -2,000 / 1000

Price Elasticity of demand = -2

So, the correct option is b. -2

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