00:01
So here we're talking about elasticity, right? and when we think about elasticity, we're comparing the response of quantity to the response in price, right? how much does quantity change in percentage terms relative to the price? so we need information on quantity and price.
00:16
But we see here that quantity is going from 40 to 75, and price is going from 50 to 20, right? these are points on the demand curve, right? so this would be an elasticity of demand.
00:31
We're looking at two points on the demand curve.
00:34
Now, however, the percentage change when we think about between two points is usually based on the midpoint percent, right? the midpoint percent.
00:46
And the idea is to make this symmetric.
00:49
So if we look at the midpoints, they are 35, and this is going to be 57 .5, right? and making it midpoint means if we go from a to b or b to a, we're going to get the exact same number.
01:01
But we'll, of course, test this with the answers we're provided.
01:04
So new quantity minus old quantity over midpoint quantity.
01:12
New price minus old price over midpoint price.
01:17
Let's rearrange.
01:18
Minus 35 times 35 divided by oh, sorry, plus 35.
01:25
Minus 30 times 57 .5.
01:29
This goes into your calculator...