Economics 9. Elasticity and total revenue The following graph shows the demand curve for kumquats. Points A, B, C, and D mark price ranges over which you will be asked to calculate the price elasticity of demand for this good. Use the purple rectangle labeled Total Revenue (diamond symbols) to compute total revenue at various prices along the demand curve. To see the area of the Total Revenue rectangle, select the shaded area with your mouse. You will not be graded on where you place the rectangle PRICE (Dollars per bushel per QUANTITY (Thousands of bushels) Total Revenue (?) Calculate the price elasticity of demand between points A and B and points C and D using the midpoint method, and fill in the Price Elasticity of Demand column in the following table. Then for each price range, identify if demand is elastic, inelastic, or unit elastic. (Hint: Find the absolute value of the price elasticity of demand to determine whether demand is elastic, inelastic, or unit elastic for each price range.) Price Range between Points Absolute Value of Price Elasticity of Demand Elastic, Inelastic, Unit Elastic Change in Total Revenue A and B C and D In the previous table, for each price range, indicate if total revenue increases, decreases, or does not change
Economics 9. Elasticity and total revenue The following graph shows the demand curve for kumquats. Points A, B, C, and D mark price ranges over which you will be asked to calculate the price elasticity of demand for this good. Use the purple rectangle labeled Total Revenue (diamond symbols) to compute total revenue at various prices along the demand curve. To see the area of the Total Revenue rectangle, select the shaded area with your mouse. You will not be graded on where you place the rectangle PRICE (Dollars per bushel per QUANTITY (Thousands of bushels) Total Revenue (?) Calculate the price elasticity of demand between points A and B and points C and D using the midpoint method, and fill in the Price Elasticity of Demand column in the following table. Then for each price range, identify if demand is elastic, inelastic, or unit elastic. (Hint: Find the absolute value of the price elasticity of demand to determine whether demand is elastic, inelastic, or unit elastic for each price range.) Price Range between Points Absolute Value of Price Elasticity of Demand Elastic, Inelastic, Unit Elastic Change in Total Revenue A and B C and D In the previous table, for each price range, indicate if total revenue increases, decreases, or does not change
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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Transcribed Image Text:Economics
9. Elasticity and total revenue
The following graph shows the demand curve for kumquats. Points A, B, C, and D mark price ranges over which you will be asked to calculate the price
elasticity of demand for this good.
Use the purple rectangle labeled Total Revenue (diamond symbols) to compute total revenue at various prices along the demand curve. To see the
area of the Total Revenue rectangle, select the shaded area with your mouse. You will not be graded on where you place the rectangle.
QUANTITY (Thousands of bushels)
Total Revenue
(?)
Calculate the price elasticity of demand between points A and B and points C and D using the midpoint method, and fill in the Price Elasticity of
Demand column in the following table. Then for each price range, identify if demand is elastic, inelastic, or unit elastic. (Hint: Find the absolute value
of the price elasticity of demand to determine whether demand is elastic, inelastic, or unit elastic for each price range.)
Price Range
between Points Absolute Value of Price Elasticity of Demand Elastic, Inelastic, Unit Elastic Change in Total Revenue
A and B
C and D
In the previous table, for each price range, indicate if total revenue increases, decreases, or does not change.
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