The following graph shows the daily demand curve for bikes in Montreal. 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.

MicroEconomics Practice:  Eric has a taco stand in downtown San Francisco. He wants to increase his total revenue. He knows that, when tacos are $1.00, he sells 20 an hour, and when he lowers the price to $0.75, he sells 25 an hour.   (a) Calculate the price elasticity of demand for Jose's hotdogs using the midpoint formula. (show the formula and your calculations) (b) Is demand elastic or inelastic? How do you know? Explain your answer. (c) Using the price elasticity of demand calculated in section A, explain whether Eric should raise or lower the price to generate more revenue.

TOPIC: Supply and demandIn the market for widgets, the supply and demand curve are “normal” 45° lines. The equilibrium price is £5 and the equilibrium quantity is 10 widgets. Show in a new graph how your answers would change if the supply curve was infinitely inelastic.

Two drivers—Kenji and Lucia—each drive up to a gas station. Before looking at the price, each places an order. Kenji says, “I'd like 10 gallons of gas.” Lucia says, “I'd like $10 worth of gas.”   Why does Lucia's demand has an unit elasticity instead of an elasticity equal to infinity?

Price (dollars) 8 7 D. 5 10 15 20 25 30 35 Quantity (units per year) In the figure above, when the price falls from $8 to $7, total revenue A) decreases from $210 to $120 so demand is inelastic. B) increases from $120 to $210 so demand is inelastic. C) decreases from $210 to $120 so demand is elastic. D) increases from $120 to $210 so demand is elastic. 6

6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Francisco. 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.   *graph 1*   On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bike.   *graph 2*   According to the midpoint method, the price elasticity of demand between points A and B is approximately ___ .   Suppose the price of bikes is currently $30 per bike, shown as point B on the initial graph. Because the demand between points A and B is ___ , a $15-per-bike increase in price will lead to ___ in total revenue per day.   In general, in order for a price decrease to cause a decrease in total revenue, demand must be ____.

Two drivers-Kevin and Maria-each drive up to a gas station. Before looking at the price, each places an order. Kevin says, "I'd like 10 gallons of gas." Maria says, "I'd like $10 worth of gas." Who's statement is elastic?

Suppose the own price elasticity of demand for good X is −2, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is −6. Determine how much the consumption of this good will change if:Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (−) sign.a. The price of good X decreases by 5 percent. percentb. The price of good Y increases by 10 percent. percentc. Advertising decreases by 2 percent. percentd. Income increases by 3 percent.  percent