1. If price were increased from $40 to $42 and quantity demanded fell from 50 to 45, calculate elasticity, state whether demand is elastic, unit elastic, or inelastic; and find how much total revenue was when price was $40 and $42

1. If price were increased from $40 to $42 and quantity demanded fell from 50 to 45, calculate elasticity, state whether demand is elastic, unit elastic, or inelastic; and find how much total revenue was when price was $40 and $42

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. If price were increased from $40 to $42
and quantity demanded fell from 50 to 45,
calculate elasticity, state whether demand is
elastic, unit elastic, or inelastic; and find how
much total revenue was when price was $40
and $42

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Step 1: Define elastic, unit and inelastic demand.

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Step 2: Determine the elasticity of demand

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Step 3: Determine the change in Total Revenue

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