6. Elasticity and total revenueThe following graph illustrates the weekly demand curve for motorized scooters in Roanoke.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.TOTAL REVEN$700 T810075000900630057005100PRICE (Dollars per scooter)450030003258 8 8 8 28 28 28 %300275250225200+175150+12510075On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $50, $75, $100, $125, $150,$175, and $200 per scooter.252300++00AAB+DemandemanoHon MIM 110 150 135HHHH++ +25 50 75 100 125 150 175 200 225 250 275 300 325PRICE (Dollars per scooter)-ATotal RevenueTotal Revenue(?)(?) According to the midpoint method, the price elasticity of demand between points A and B is approximatelySuppose the price of scooters is currently $200 per scooter, shown as point A on the initial graph. Because the demand between points A and B isa $25-per-scooter decrease in price will lead toin total revenue per week.In general, in order for a price decrease to cause a decrease in total revenue, demand must be

Demand elasticity measures how sensitive a good's quantity desired is to variations in its price. It…

According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $200 per scooter, shown as point A on the initial graph. Because the demand between points A and B is a $25-per-scooter decrease in price will lead to in total revenue per week. In general, in order for a price decrease to cause a decrease in total revenue, demand must be

According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $200 per scooter, shown as point A on the initial graph. Because the demand between points A and B is a $25-per-scooter decrease in price will lead to in total revenue per week. In general, in order for a price decrease to cause a decrease in total revenue, demand must be

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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From the data in Table 5.5 about demand for smart phones, calculate the price elasticity of demand from: point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
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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?
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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.