The demand elasticity for abdominoplasty using the midpoints formula
is : | -7.35| .
Elasticity is a microeconomic concept that attempts to quantify the sensitivity of demand to price changes. Demand is said to be elastic when the result of calculating elasticity is greater than one in modulus (price sensitive). When the value is less than one, demand in modules is inelastic - price sensitive.
The following formula is used to calculate elasticity by the midpoint:
E = (q1-q0) / [ (q1 + q0) / 2] / (p1-p0) / [ (p1 + p0) / 2] / (p1-p0) / [ (p1 + p0) / 2] .
Where:
p0 = initial price
p1 = final cost
q0 denotes the initial quantity.
q1 = total amount
E stands for elasticity.
Using the values from the formula:
E = [(270-240) / (270+ 240) / 2] / [(6000-6400) / (6000 + 6400) / 2]}
E = 0.1176 / -0.016
E = | -7.35|
The demand elasticity is : E = | -7.35|
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