The table below shows the
Price Quantity Demanded
($/pack) (# of Packs)
$12 0
8 12,000
6 18,000
4 24,000
2 30,000
0 36,000
What is the price elasticity of demand when the price increases from $0 to $2? _________ Is demand elastic or inelastic? ___________
What is the price elasticity of demand when the price increases from $6 to $8? _____________ Is demand elastic or inelastic? ___________
Based on the elasticity values calculated in parts (a) and (b), does total revenue increase or decrease (in each case, state your reasoning in terms of elasticity):
when the price increases from $0 to $2? _________
when the price increases from $6 to $8? _____________
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