Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 and, as a result, the quantity of bags demanded increases from 600 to 800. Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is

a. 0.35

b. 0.43

c. 2.33

d. 2.89

Therefore the price elasticity of demand for frozen chicken is 0.43.

Step-by-step explanation:

Price elasticity of demand: Demand of customer extends or contracts with respect a fall or rise the price of a product. The ratio of changes of quantity to the changes of price is called elasticity of demand.

The formula of midpoint is

Here Q₁=$6.50,Q₂= $5.75, P₁=600 and P₂= 800.

The average price is   = $6.125

The average quantity =700

Price elasticity of demand  

                                          = 0.428

                                         ≈0.43

Therefore the price elasticity of demand for frozen chicken is 0.43.

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step-by-step explanation:

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