On the following graph, use the green point (triangle symbol) to plot the daily total revenue when the market price is $50, $75, $100, $125, $150,$175, and $200 per bippitybop.21802040Total Revenue1900176016201480134012001060920255075100 125 150 175 200 225 250 275 300PRICE (Dollars per bippitybop)According to the midpoint method, the price elasticity of demand between points A and B on the initial graph is approximatelySuppose the price of bippitybops is currently $50 per bippitybop, shown as point B on the initial graph. Because the price elasticity of demand betweenpoints A and B isa $25-per-bippitybop increase in price will lead toin total revenue per day.In general, in order for a price decrease to cause a decrease in total revenue, demand must beTOTAL REVENUE (Dollars) 6. Elasticity and total revenue IThe following graph shows the daily demand curve for bippitybops in Halifax.Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve.Note: You will not be scored on any changes made to this graph.300275250Total Revenue225200175 +150125100755025Demand36.1215182124273033 36QUANTITY (Bippitybops per day)PRICE (Dollars per bippitybop)

Blanks: 0.33 Inelastic, increase Inelastic

Answered: 6. Elasticity and total revenue I The…

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter5: Price Elasticity Of Demand And Supply

Section5.3: Determinants Of Price Elasticity Of Demand

Problem 1YTE: According to the previous discussion, what factors influence the price elasticity of demand for...

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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
From the data in Table 5.6 about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
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Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.
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