On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $20, $30, $40, $50, $60, $70 and $80 per scooter.
On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $20, $30, $40, $50, $60, $70 and $80 per scooter.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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.
130
120
110
100
PRICE (Dollars per scooter)
8 8 8
8 8
90
80
70
60
50
40
30
20
10
0
0
A
B
10 20 30
40
Demand
50 60 70 80 90 100 110 120 130
QUANTITY (Scooters)
Total Revenue
?
Transcribed Image Text:On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $20, $30, $40, $50, $60, $70
and $80 per scooter.
TOTAL REVENUE (Dollars)
2480
2240
2000
1760
1520
1280
1040
800
560
320
0 10 20
30 40 50 60 70 80 90 100 110 120 130
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 $80 per scooter, shown as point A on the initial graph. Because the demand between points A and B is
, a $10-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
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