Question

5. The variation in elasticity and total revenue along a demand curve 

The following graph shows the daily demand curve for bippitybops in New York City. 

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. 

Answer 1

Total Revenue = Selling Price × Quantity Sold

Thus, at Point A we see Selling price is 50 dollar and quantity is 18 thus total revenues are 50×18=900 dollars.

Similarly at point B we get 40×24= 960 dollars.

Answer 2

ANSWER :

R_A = P_A * Q_A = 50*18 = 900 ($) (ANSWER).

R_B = P_B * Q_B = 40*24 = 960($) (ANSWER).