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Using real numbers, if the quantity demanded drops from 100 units to 95 units when the price rises from $5 to $5.50, the PED is: PED = (95 100) / 100 * 5.5 5 / 5 * 5 = -5/100 * 0.1 / 5/50 * 10 = -0.05 / 0.2 = -0.25 The mid-point formula is an alternative approach that uses the average change in demand and price: PED = (Q2 Q1) / (Q1 + Q2) * 0.5 / (P2 P1) / (P1 + P2) * 0.5 For the example above, the mid-point PED would be: PED = (95 100) / (95 + 100) * 0.5 / (5.5 5) / (5 + 5.5) * 0.5 = -5/195 * 0.5 / 0.5/105 * 0.5 = -0.026 / 0.048 = -0.54 Compared to the first formula, the mid-point elasticity is a bit higher in magnitude, indicating demand is slightly more elastic