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. 6360 TOTAL REVENUE (Dollars) 5880 5400 4440 3060 3480 3000 2040 0 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dollars per bike) 4 Total Revenue ? According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of bikes is currently $125 per bike, shown as point A on the initial graph. Because the demand between points A and B is a $25-per-bike decrease in price will lead to in total revenue per day. In general, in order for a price increase to cause an increase in total revenue, demand must be

ENGR.ECONOMIC ANALYSIS
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6. Elasticity and total revenue
The following graph shows the daily demand curve for bikes in Houston.
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.
PRICE (Dollars per bike)
300
275
)
250
225
175
150
125
100
75
50
25
0
0
+
6
12 18
24 30 36 42 48
QUANTITY (B)
Demand
54 60 66 72
Total Revenue
Transcribed Image Text:6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Houston. 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. PRICE (Dollars per bike) 300 275 ) 250 225 175 150 125 100 75 50 25 0 0 + 6 12 18 24 30 36 42 48 QUANTITY (B) Demand 54 60 66 72 Total Revenue
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.
6360
TOTAL REVENUE (Dollars)
5880
5400
4920
4440
3060
3480
3000
2520
2040
0 25 50
75 100 125 150 175 200 225 250 275 300
PRICE (Dollars per bike)
Total Revenue
According to the midpoint method, the price elasticity of demand between points A and B is approximately
Suppose the price of bikes is currently $125 per bike, shown as point A on the initial graph. Because the demand between points A and B is
a $25-per-bike decrease in price will lead to
in total revenue per day.
In general, in order for a price increase to cause an increase in total revenue, demand must be
Transcribed Image Text: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. 6360 TOTAL REVENUE (Dollars) 5880 5400 4920 4440 3060 3480 3000 2520 2040 0 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dollars per bike) Total Revenue According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of bikes is currently $125 per bike, shown as point A on the initial graph. Because the demand between points A and B is a $25-per-bike decrease in price will lead to in total revenue per day. In general, in order for a price increase to cause an increase in total revenue, demand must be
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