Write out the formula for the Price Elasticity of Demand. Now, given the following market demand schedule, calculate the Price Elasticity of Demand using the midpoint method, for both gaps, as (1) price increases from P=0 to P=2, and (2) as price increases from P=2 to P=4. For each gap, is the demand curve elastic, inelastic, or does it have unit elasticity?
P Q Price Elasicity of Demand Is Curve elastic here?
0 10
2 6
4 0