Midpoint formula

The elasticity \epsilon can be calculated using the midpoint formula:

\epsilon = 100*\frac{\frac{Q_1 - Q_0}{\bar{Q}}}{ \frac{P_1 - P_0}{\bar{P}}}

where X_0 is the initial quantity, X_1 is the new quantity, \bar{X} is the average quantity, P_1 is the new price, P_0 is the initial price and \bar{P} is the average price.

The average quantity is calculated:

\bar{Q} = \frac{Q_1 + Q_0}{2}

The average price is also calculated:

\bar{P} = \frac{P_1 + P_0}{2}


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