Suppose John, the owner-manager of a local hotel, projects the following demand for his rooms: Price ($) Quantity Purchased (per Night) Total Revenue 90 100 110 90 130 70 (a)Calculate the price elasticity of demand between $90 and $110. (Use the midpoint formula) (b)Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic? (c)Will John’s total revenue rise if he increases the price from $90 to $110? (d)Calculate the price elasticity of demand between $110 and $130. (e)Is the price elasticity of demand between $110 and $130 elastic, unit elastic, or inelastic? (f)Will John’s total revenue rise if he increases the price from $110 to $130?
- Suppose John, the owner-manager of a local hotel, projects the following demand for his rooms:
|
Price ($) |
Quantity Purchased (per Night) Total Revenue |
|
90 |
100 |
|
110 |
90 |
|
130 |
70 |
(a)Calculate the price
(b)Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic?
(c)Will John’s total revenue rise if he increases the price from $90 to $110?
(d)Calculate the price elasticity of demand between $110 and $130.
(e)Is the price elasticity of demand between $110 and $130 elastic, unit elastic, or inelastic?
(f)Will John’s total revenue rise if he increases the price from $110 to $130?
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