7. refer to figure 5 - 6. using the midpoint method, what is the price elasticity of supply between points d…

Explanation:

Step1: Identify values for points D and E

At point D: $P_1 = 8$, $Q_1=400$. At point E: $P_2 = 10$, $Q_2 = 450$.

Step2: Calculate the percentage change in quantity supplied

The formula for percentage - change in quantity using the mid - point method is $%\Delta Q=\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2}}\times100$. $%\Delta Q=\frac{450 - 400}{\frac{450 + 400}{2}}\times100=\frac{50}{\frac{850}{2}}\times100=\frac{50}{425}\times100\approx11.76%$.

Step3: Calculate the percentage change in price

The formula for percentage - change in price using the mid - point method is $%\Delta P=\frac{P_2 - P_1}{\frac{P_2+P_1}{2}}\times100$. $%\Delta P=\frac{10 - 8}{\frac{10 + 8}{2}}\times100=\frac{2}{\frac{18}{2}}\times100=\frac{2}{9}\times100\approx22.22%$.

Step4: Calculate the price elasticity of supply

The formula for price elasticity of supply ($E_s$) is $E_s=\frac{%\Delta Q}{%\Delta P}$. $E_s=\frac{11.76%}{22.22%}\approx0.53$.

Answer:

a. 0.53