→ Consider the market for a new CD, where the price is initially $10.00 and 20 thousand copies are sold, as indicated in the figure at point A The music company is considering lowering the price to $8.00, at which price 28 thousand copies would be sold. What is total revenue at the initial price (at point A)? Revenue is initially $ thousand. What would total revenue be at the lower price (at point B)? Revenue would be $ thousand. Given this change in total revenue, is demand between these prices elastic or inelastic? Demand (in this range of prices) is Price (dollars per copy) 15- 14+ 13- 12- 11- 10- 9- 7- 4- 3- 2- 1- B D 04 8 12 16 20 24 28 32 36 40 44 48 52 56 60 Quantity (copies in 1000s) Q Q G
→ Consider the market for a new CD, where the price is initially $10.00 and 20 thousand copies are sold, as indicated in the figure at point A The music company is considering lowering the price to $8.00, at which price 28 thousand copies would be sold. What is total revenue at the initial price (at point A)? Revenue is initially $ thousand. What would total revenue be at the lower price (at point B)? Revenue would be $ thousand. Given this change in total revenue, is demand between these prices elastic or inelastic? Demand (in this range of prices) is Price (dollars per copy) 15- 14+ 13- 12- 11- 10- 9- 7- 4- 3- 2- 1- B D 04 8 12 16 20 24 28 32 36 40 44 48 52 56 60 Quantity (copies in 1000s) Q Q G
Chapter4: Supply And Demand: An Initial Look
Section: Chapter Questions
Problem 1DQ
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Consider the market for a new CD, where the price is initially $10.00 and
20 thousand copies are sold, as indicated in the figure at point A
The music company is considering lowering the price to $8.00, at which
price 28 thousand copies would be sold.
What is total revenue at the initial price (at point A)?
Revenue is initially $ thousand.
What would total revenue be at the lower price (at point B)?
Revenue would be $ thousand.
Given this change in total revenue, is demand between these prices
elastic or inelastic?
Demand (in this range of prices) is
Price (dollars per copy)
15-
14+
13-
12-
11-
10-
9-
7-
4-
3-
2-
1-
B
D
04 8 12 16 20 24 28 32 36 40 44 48 52 56 60
Quantity (copies in 1000s)
Q
Q
G
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