Question

The following graph shows the demand curve for trekking poles. Points L, M, N, and O mark price ranges over which you will be asked to calculate the price elasticity of demand for this good Use the purple rectangle labeled Total Revenue (diamond symbols) to compute total revenue at various prices along the demand curve. To see the area of the Total Revenue rectangle, select the shaded area with your mouse. You will not be graded on where you place the rectangle 10 Total Revenue 0 1 235 6 7810 QUANTITY (Thousands of poles) Calculate the price elasticity of demand between points L and M and points N and O using the midpoint method, and fill in the Price Elasticity of Demand column in the following table. Then for each price range, identify whether demand is elastic, inelastic, or unit elastic. Price Range between Points L and M N and O Price Elasticity of Demand Elastic, Inelastic, Unit Elastic Change in Total Revenue In the previous table, for each price range, indicate whethertotal revenue increases, decreases, or does not change

Answer 1

L, M, N andl o mok pice anges pice velastict 7 -3 (abs PE , lemand is elastic e n total evenue x3)(6x) - Q1-16 :Total vevenue nceases nelaStic)