3. Using the midpoint method
The following graph shows two known points (X and Y) on a demand curve for oranges.
According to the midpoint method, the price elasticity of demand for oranges between point X
and point Y is approximately
, which suggests that the demand for oranges is
between points X and Y.
price elasticity of demand
measures the responsiveness of consumers to changes in
price. For example, if consumers change their purchasing behaviour very little in response to a
drastic change in price, demand is said to be inelastic; but if consumers change their
1 / 1