Consider the following demand schedule: Price Quantity demanded Total revenue $10 3 $30 $ 9 4 $36 $ 8 5 $40 $ 7 6 $42 $ 6 7 $42 $ 5 8 $40 Required: Using total revenue, identify the price range where the price elasticity of demand is relatively elastic. Using total revenue, identify the price range where the price elasticity of demand is relatively inelastic. Using total revenue, identify the price range where the price elasticity of demand is unit elastic. Discuss three factors that tend to make the price elasticity of demand for a product more elastic.
Consider the following demand schedule: Price Quantity demanded Total revenue $10 3 $30 $ 9 4 $36 $ 8 5 $40 $ 7 6 $42 $ 6 7 $42 $ 5 8 $40 Required: Using total revenue, identify the price range where the price elasticity of demand is relatively elastic. Using total revenue, identify the price range where the price elasticity of demand is relatively inelastic. Using total revenue, identify the price range where the price elasticity of demand is unit elastic. Discuss three factors that tend to make the price elasticity of demand for a product more elastic.
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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Question
Consider the following demand schedule:
Price |
Quantity demanded |
Total revenue |
$10 |
3 |
$30 |
$ 9 |
4 |
$36 |
$ 8 |
5 |
$40 |
$ 7 |
6 |
$42 |
$ 6 |
7 |
$42 |
$ 5 |
8 |
$40 |
Required:
- Using total revenue, identify the price range where the price
elasticity of demand is relatively elastic. - Using total revenue, identify the price range where the price elasticity of demand is relatively inelastic.
- Using total revenue, identify the price range where the price elasticity of demand is unit elastic.
- Discuss three factors that tend to make the price elasticity of demand for a product more elastic.
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