Final answer:
Price elasticity of demand using the Midpoint Method is calculated by averaging the percent changes in quantity and price between two points, providing a consistent elasticity value for both price increases and decreases.
Step-by-step explanation:
The student's question revolves around calculating the price elasticity of demand (PED) using the Midpoint Method. This method is useful as it provides the same elasticity result regardless of whether there is a price increase or decrease. To calculate the PED using the Midpoint Method, the formula takes the average percentage change in quantity demanded and the average percentage change in price between two points.
Advantages of the Midpoint Method
The advantage of using the Midpoint Method is its consistent outcome for elasticity, which is achieved by using the average of the initial and final quantities and prices as the base for percentage changes. This eliminates the problem of whether to use the original or new values as the base when calculating percentage changes.