Lesson 3.5-Price Elasticity of Demand and Straight-line Demand Curves 1. Using the graph provided, analyze the effects of elasticity and total revenue using a straight-line demand curv a. When demand is unit elastic, is total revenue increasing, decreasing, or maximized? b. When demand is inelastic, is total revenue increasing, decreasing, or maximized? c. When demand is elastic, is total revenue increasing, decreasing, or maximized? d. Suppose you have just calculated price elasticity of demand and found E-1.5, is total revenue increasing, decreasing, or maximized? Suppose you have just calculated price elasticity of demand and found E,-0.4, is total revenue increasing, decreasing, or maximized? f. Suppose you have just calculated price elasticity of demand and found E-1, is total revenue increasing, decreasing, or maximized? Price (dollars) Total Revenue 86 32 2 Eg-5.66 I Elastic Range I E₁=1 LL 0 10 20 E-0.33 1 (b) Inelastic Range D 70 80 Quantity Demanded Total Revenue Quantity Demanded

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