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To calculate price elasticity of demand (PED) and cross elasticity of demand (XED), we need to carefully apply the standard formulas from introductory microeconomics. Price elasticity of demand measures the responsiveness of quantity demanded of a good to changes in its own price. It is given by the formula: $$ PED = \frac{\%\ \text{change in quantity demanded}}{\%\ \text{change in price}} $$ For a numerical calculation, the percentage changes can be computed using the midpoint (or arc elasticity) method, which ensures that the elasticity measure is symmetric. The formula using the midpoint method is: $$ PED = \frac{Q_2 - Q_1}{(Q_1 + Q_2)/2} \div \frac{P_2 - P_1}{(P_1 + P_2)/2} $$ Where $Q_1$ and $Q_2$ are the initial and new quantities demanded, and $P_1$ and $P_2$ are the initial and new ______ __________ ___ ______ ________ _____.
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