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Question: Suppose quantity demanded increases from 480 units to 520 units when price falls; this means that quantity changed by what exact percentage (using the midpoint formula)?
The percentage change is 8.33%.
The midpoint formula for calculating the percentage change in quantity demanded is as follows: [(New Quantity - Old Quantity) / ((New Quantity + Old Quantity) / 2)] * 100% In this case, the new quantity is 520 units and the old quantity is 480 units. Hence, Percentage Change = [(520 - 480) / ((520 + 480) / 2)] * 100% or Percentage Change = [40 / 500] * 100% The percentage change in quantity demanded is therefore 8%.
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