Question

From the give table calculate Elasticity of Price, Total Revenue and Marginal Revenue. Also, explain the relationship between AR and MR?

Price Quantity Total Revenue Marginal Revenue

in this question formula has 0.5 where its come from because checked other formula it was not there

Answer 1

Midpoint elasticity measures the average change in demand and price, rather than the change at the endpoint.

Here is how the midpoint formula looks: [(D2 minus D1) divided by (D2 plus D1, then divided by 2)] divided by [(P2 minus P1) divided by (P2 plus P1, then divided by 2)]. Note that the denominator is an average because the denominator sums get divided by 2.