The price of strawberries falls from $1.50 to $1.00 per carton and the quantity demanded goes from 100,000 to 200,000 cartons. use the midpoint method to find the price elasticity of demand.

To solve for the price elasticity of demand, we utilize the formula below.

Price elasticity of demand = % Change in Demand Quantity
                                                  % Change in Price

where:    % Change in Demand Quantity = (Qnew -Qold)/Qold
               % Change in Price = (Pnew - Pold/)Pold

Using midpoint method, the formula changes to:

% Change in Demand Quantity = (Qnew -Qold)/Qave = (200000-100000)/150000 = 67%
             
  % Change in Price = (Pnew - Pold/)Pave = (1-1.5)/1.25 = -40%

Price elasticity of demand = 67%/-40% = -1.675%

ANSWER: -1.675%

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