Elastic Inserts

If a10% increase in price causes a 25% reduction in the demand what is the price elasticity of demand?

If a 10 percent increase in the price of Cap’n Crunch cereal causes a 25 percent reduction in the number of boxes of cereal demanded, what is the price elasticity of demand for Cap’n Crunch cereal? Is demand for Cap’n Crunch cereal elastic or inelastic?

I don't understand how to insert this into the midpoint equation. any help is appreciated!

The price elasticity of demand is -2.5, which is elastic.

You cannot use the midpoint equation, or even the standard equation, to arrive at this because it does not give you the numbers you need to plug into the equations, instead it gives you the results of the equations. The midpoint formula would give you a method of finding out that the price increase was 10%, and that the demand decrease was 25%. Once you already have those percentage numbers, the formula used (either midpoint or standard) does not matter; you are already beyond that point.

The price elasticity of demand measures the degree of responsiveness to demand of a given price change. It is put into numeric form using the formula: P.E.D. = %change in quantity divided by %change in price. If the quantity changes by a larger percentage than the price, then it would be considered elastic, and would have an absolute value of >1. If the price changes by a larger percentage than the quantity, then it would be considered inelastic, and would have an absolute value of <1.

The midpoint equation only changes the method of arriving at the 10% and 25% figures, it has nothing to do with what you do with those numbers after you get them. It would require you to figure out those numbers by using the beginning and ending prices, and the beginning and ending quantites, in an equation to get the percentages. In this question, you are not given that information.