Final answer:
The midpoint or arc elasticity formula is used to measure elasticity of demand that remains consistent when moving between two points on a demand curve. For non-linear demand curves, the elasticity varies at different price levels, and using the P=2/Q demand curve equation, you can determine the elasticity for price changes from 5 to 4 and from 9 to 8.
Step-by-step explanation:
The formula to determine the elasticity of demand so that the elasticity from moving between two units is the same in either direction is the midpoint or arc elasticity formula. The arc elasticity of demand is calculated as:
Ed = [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]
Using the given demand curve equation P = 2/Q, you can calculate the elasticity as the price falls from 5 to 4 and from 9 to 8. However, the elasticity of demand for non-linear demand curves such as this one will not be the same between different price levels due to the curvature of the demand line. In linear demand curves, elasticity changes as we move along the curve, being unit elastic at the midpoint, elastic above that point, and inelastic below that point.
To find the quantities corresponding to the prices of 5 and 4, substitute the prices into the demand equation to get Q = 2/5 and Q = 2/4, respectively. For the prices of 9 and 8, you would get Q = 2/9 and Q = 2/8. Inserting these into the arc elasticity formula will give the respective elasticities.