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To calculate the price elasticity of supply using the midpoint method, we use the following formula:

\[
\text{Price Elasticity of Supply} = \frac{\left(\frac{\Delta Q}{Q_{\text{avg}}}\right)}{\left(\frac{\Delta P}{P_{\text{avg}}}\right)}
\]

Where:
- $\Delta Q$ is the change in quantity supplied.
- $Q_{\text{avg}}$ is the average of the initial and final quantities supplied.
- $\Delta P$ is the change in price.
- $P_{\text{avg}}$ is the average of the initial and final prices.

Given:
- Initial price $P_1 = 4.10$
- Final price $P_2 = 3.50$
- Initial quantity supplied $Q_1 = 260$
- Final quantity supplied $Q_2 = 180$

### Step 1: Calculate the average quantity and average price
\[
Q_{\text{avg}} = \frac{Q_1 + Q_2}{2} = \frac{260 + 180}{2} = 220
\]
\[
P_{\text{avg}} = \frac{P_1 + P_2}{2} = \frac{4.10 + 3.50}{2} = 3.80
\]

### Step 2: Calculate the changes in quantity and price
\[
\Delta Q = Q_2 - Q_1 = 180 - 260 = -80
\]
\[
\Delta P = P_2 - P_1 = 3.50 - 4.10 = -0.60
\]

### Step 3: Calculate the elasticity using the midpoint formula
\[
\text{Price Elasticity of Supply} = \frac{\left(\frac{-80}{220}\right)}{\left(\frac{-0.60}{3.80}\right)} = \frac{-0.3636}{-0.1579} = 2.30
\]

Thus, the price elasticity of supply is approximately **2.30**.

Would you like more details or have any questions?

Here are 5 related questions:
1. How does a price elasticity of supply value greater than 1 indicate elasticity?
2. What factors can affect the elasticity of supply for goods like laundry detergent?
3. How does the midpoint method differ from the point elasticity formula?
4. Can price elasticity of supply ever be negative, and what would that mean?
5. What happens to supply when the elasticity is equal to 1?

**Tip:** The midpoint method helps avoid bias in elasticity calculations by averaging the initial and final values of both price and quantity.

Suppose that when the price of laundry detergent decreases from $4.10 to $3.50, quantity supplied decreases from 260 to 180. Using the mid-point elasticity approach, calculate price elasticity of supply.

Learn how to calculate the price elasticity of supply when the price of laundry detergent decreases from $4.10 to $3.50, and the quantity supplied decreases from 260 to 180. Step-by-step solution using the midpoint elasticity approach, suitable for college-level economics.

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