# Midpoint Method for Price Elasticity of Demand Calculator

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## What is Midpoint Method for Price Elasticity of Demand Calculator?

Midpoint Method for Price Elasticity of Demand Calculator helps calculating the Price Elasticity of Demand, using Midpoint Method for Price Elasticity of Demand formula.

## What is Price Elasticity of Demand?

Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price, ceteris paribus. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price.

## The Formula of Price Elasticity of Demand

Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price

## Example of Price Elasticity of Demand

For example, If the price of a product increases by 10% and as a result the quantity demanded decreases by 5%, the Price Elasticity of Demand equals -0.50 (-5/10).

## What is Midpoint Method for Price Elasticity of Demand?

The midpoint formula modifies the original price elasticity calculation to determine how various factors influence the price of a product. This formula typically assesses the relationship between price and product demand, but it can also illustrate the influence of supply. In the former case, actual purchase quantities are used to measure the level of demand.

## The Formula of Midpoint Method for Price Elasticity of Demand Calculator

Price Elasticity of Demand = {[(Q2 - Q1) / (Q2 + Q1) / 2]} / {[(P2 - P1) / (P2 + P1) / 2]}

Where:

P1 = the first price point

P2 = the second price point

Q1 = the quantity point associated with the first price point (P1)

Q2 = the quantity point associated with the second price point (P2)

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