5. Elasticity and total revenueThe following graph shows the daily demand curve for bikes in Miami..Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve.Note: You will not be graded on any changes made to this graph.300275250Total Revenue225200A 175150125100755025Demand1015 20 2530 35 40 45 50 55 60QUANTITY (Bikes)On the folowing graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150,$175, and $200 per bike.53004500Total Revenue4500400W 370033002900250021001700255075 100 125 150 175 200 225 250 275 300PRICE (Dollars per bike)According to the midpoint method, the price elasticity of demand between points A and B is approximatelySuppose the price of bikes is currently $100 per bike, shown as point B on the initial graph. Because the demand between points A and B isva $25-per-bike increase in price will lead tov in total revenue per day.In general, in order for a price decrease to cause a decrease in total revenue, demand must beTOTAL REVENUE (Dollars)PRICE (Dollars per bike)

Elasticity is a measure of the responsiveness of the change in demand as a result of a change in…

5. Elasticity and total revenue The following graph shows the dally demand curve for bikes in Miami. Use the green rectangle (triangle symbols) to compute total revenue at vanious prices along the demand curve. Note: You will not be graded on any changes made to this graph. 300 275 250 Total Revenue 225 200 夏175 100 125 100 75 60 25 Demand 5 10 15 20 25 30 35 40 45 50 55 60 QUANTITY (Bikas) On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike. 5300 4000 Total Revenue 4500 400 w 3700 2300 2900 2500 200 1700 O 25 se 75 100 125 150 175 20o 225 250 275 300 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately . Suppose the price of bikes is currently $100 per bike, shown as point B on the initial graph. Because the demand between points A and B is va $25-per-bike increase in price will lead to in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be TOTAL REVENUE (Dollars) PRICE (Dolars per bike)

5. Elasticity and total revenue The following graph shows the dally demand curve for bikes in Miami. Use the green rectangle (triangle symbols) to compute total revenue at vanious prices along the demand curve. Note: You will not be graded on any changes made to this graph. 300 275 250 Total Revenue 225 200 夏175 100 125 100 75 60 25 Demand 5 10 15 20 25 30 35 40 45 50 55 60 QUANTITY (Bikas) On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike. 5300 4000 Total Revenue 4500 400 w 3700 2300 2900 2500 200 1700 O 25 se 75 100 125 150 175 20o 225 250 275 300 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately . Suppose the price of bikes is currently $100 per bike, shown as point B on the initial graph. Because the demand between points A and B is va $25-per-bike increase in price will lead to in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be TOTAL REVENUE (Dollars) PRICE (Dolars per bike)

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 8PA: The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase:...

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