Lesson 3.5-Price Elasticity of Demand and Straight-line Demand Curves 1. Using the graph provided, analyze the effects of elasticity and total revenue using a straight-line demand curv a. When demand is unit elastic, is total revenue increasing, decreasing, or maximized? b. When demand is inelastic, is total revenue increasing, decreasing, or maximized? c. When demand is elastic, is total revenue increasing, decreasing, or maximized? d. Suppose you have just calculated price elasticity of demand and found E-1.5, is total revenue increasing, decreasing, or maximized? Suppose you have just calculated price elasticity of demand and found E,-0.4, is total revenue increasing, decreasing, or maximized? f. Suppose you have just calculated price elasticity of demand and found E-1, is total revenue increasing, decreasing, or maximized? Price (dollars) Total Revenue 86 32 2 Eg-5.66 I Elastic Range I E₁=1 LL 0 10 20 E-0.33 1 (b) Inelastic Range D 70 80 Quantity Demanded Total Revenue Quantity Demanded
Lesson 3.5-Price Elasticity of Demand and Straight-line Demand Curves 1. Using the graph provided, analyze the effects of elasticity and total revenue using a straight-line demand curv a. When demand is unit elastic, is total revenue increasing, decreasing, or maximized? b. When demand is inelastic, is total revenue increasing, decreasing, or maximized? c. When demand is elastic, is total revenue increasing, decreasing, or maximized? d. Suppose you have just calculated price elasticity of demand and found E-1.5, is total revenue increasing, decreasing, or maximized? Suppose you have just calculated price elasticity of demand and found E,-0.4, is total revenue increasing, decreasing, or maximized? f. Suppose you have just calculated price elasticity of demand and found E-1, is total revenue increasing, decreasing, or maximized? Price (dollars) Total Revenue 86 32 2 Eg-5.66 I Elastic Range I E₁=1 LL 0 10 20 E-0.33 1 (b) Inelastic Range D 70 80 Quantity Demanded Total Revenue Quantity Demanded
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....
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