Answer:
-0.325
Explanation:
The computation of the price elasticity of demand using mid point formula is shown below:
= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of price)
where,
Change in quantity demanded is
= Q2 - Q1
= 98 - 108
= -10
And, average of quantity demanded is
= (98 + 108 ) ÷ 2
= 103
Change in price is
= P2 - P1
= $27 - $20
= $7
And, average of price is
= ($27 + $20) ÷ 2
= 23.5
So, after solving this, the price is -0.325
