The midpoint formula for elasticity is the percentage change in quantity demanded divided by the percentage change in price. The equation may be complex for some because of all the different numbers involved, but the process is relatively straightforward as long as each step is broken down.
Calculating the elasticity of a product is vital to determining how a quantity or price change affects the other value. The percentage change in quantity demanded can be calculated by adding the old and new quantities and dividing the figure by two. The percentage change in price is found in the same manner, except the old and new prices are used.
