Calculating Elasticity and Percentage Changes

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Question 1

Suppose a veggie burger goes up in price from $6 to $9. The percentage change or growth rate in price is ________.

• 6/9 or 67%
• 3/9 or 33%
  
• 3/6 or 50%
  

Question 2

Although slightly more complicated to calculate, one reason the midpoint (arc) elasticity approach is considered more accurate is that it

• assumes the profit does not change with a price increase.
• give the same answer regardless of which price and which quantity should be in the denominator.
  
• allows only elasticity values that are higher than 1.0.