According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $125 per scooter, shown as point B on the initial graph. Because the demand between points A and B is , a $25-per-scooter increase in price will lead to in total revenue per week. In general, in order for a price increase to cause a decrease in total revenue, demand must be

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6. Elasticity and total revenue
The following graph illustrates the weekly demand curve for motorized scooters in Moline.
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.
PRICE (Dollars per scooter)
TOTAL REVENUE (Dollars)
8700
7500
6300
5700
5100
4500
3300
300
275
3300
200
175
150
125
100
75
On 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.
50
25
0
0 10
30
D 25 50
*4
**
Demand
50 60 70 80 90 100 110 120 130
QUANTITY (Scooters)
Total Revenue
75 100 125 150 175 200 225 250 275 300 325
PRICE (Dollars per scooter)
Total Revenue
@
According to the midpoint method, the price elasticity of demand between points A and B is approximately
Suppose the price of scooters is currently $125 per scooter, shown as point B on the initial graph. Because the demand between points A and B is
a $25-per-scooter increase in price will lead to
In total revenue per week.
In general, in order for a price increase to cause a decrease in total revenue, demand must be
Transcribed Image Text:6. Elasticity and total revenue The following graph illustrates the weekly demand curve for motorized scooters in Moline. 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. PRICE (Dollars per scooter) TOTAL REVENUE (Dollars) 8700 7500 6300 5700 5100 4500 3300 300 275 3300 200 175 150 125 100 75 On 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. 50 25 0 0 10 30 D 25 50 *4 ** Demand 50 60 70 80 90 100 110 120 130 QUANTITY (Scooters) Total Revenue 75 100 125 150 175 200 225 250 275 300 325 PRICE (Dollars per scooter) Total Revenue @ According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of scooters is currently $125 per scooter, shown as point B on the initial graph. Because the demand between points A and B is a $25-per-scooter increase in price will lead to In total revenue per week. In general, in order for a price increase to cause a decrease in total revenue, demand must be
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