In this question, we will determine the price elasticity of demand using both the coefficient of elasticity and the total revenue test.
Use the demand schedule in the table below to answer the following questions.
Quantity Demand
Price
10
200
20
150
30
100
40
50
50
25
a) Calculate the total revenue for each row in the demand schedule. indicate whether total revenue increases or decreases between each row int eh demand schedule. use the total revenue test to classify each price/quantity change as elastic, inelastic, or uni-elastic.
b) calculate the own price-elasticity coefficient for each row in the demand schedule. use the coefficients you calculate to classify each price/quantity change as elastic, inelastic, unit elastic.
in your answer it will be useful to recall that the midpoint formula for percentage change is:
%change midpoint = (final - initial) / ((finial + initial)/2)
and own price elasticity can be calculated by using the formula
Ed= (percentage change in quantity demand of product x) / (percentage change the in the price of product x)
In this question, we will determine the price elasticity of demand using both the coefficient of elasticity and the total revenue test.
Use the demand schedule in the table below to answer the following questions.
| Quantity Demand | Price |
| 10 | 200 |
| 20 | 150 |
| 30 | 100 |
| 40 | 50 |
| 50 | 25 |
a) Calculate the total revenue for each row in the demand schedule. indicate whether total revenue increases or decreases between each row int eh demand schedule. use the total revenue test to classify each price/quantity change as elastic, inelastic, or uni-elastic.
b) calculate the own price-elasticity coefficient for each row in the demand schedule. use the coefficients you calculate to classify each price/quantity change as elastic, inelastic, unit elastic.
in your answer it will be useful to recall that the midpoint formula for percentage change is:
%change midpoint = (final - initial) / ((finial + initial)/2)
and own price elasticity can be calculated by using the formula
Ed= (percentage change in quantity demand of product x) / (percentage change the in the price of product x)
Related textbook solutions
Related questions
Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic. Using the data from the demand schedule, graph the demand curve, the marginal revenue curve, and the total revenue curve. Identify the elastic, unit elastic, and inelastic segments along the demand curve.
| Price (P) | Quantity Demanded (Q) | Total Revenue | Marginal Revenue | Price elasticity of demand |
| $5.00 | 0 | |||
| 4.50 | 1 | |||
| 4.00 | 2 | |||
| 3.50 | 3 | |||
| 3.00 | 4 | |||
| 2.50 | 5 | |||
| 2.00 | 6 | |||
| 1.50 | 7 | |||
| 1.00 | 8 | |||
| 0.50 | 9 | |||
| 0 | 10 |
Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic. Using the data from the demand schedule, graph the demand curve, the marginal revenue curve, and the total revenue curve. Identify the elastic, unit elastic, and inelastic segments along the demand curve.
| Price (P) | Quantity Demanded (Q) | Total Revenue | Marginal Revenue | Price elasticity of demand |
| $5.00 | 0 | |||
| 4.50 | 1 | |||
| 4.00 | 2 | |||
| 3.50 | 3 | |||
| 3.00 | 4 | |||
| 2.50 | 5 | |||
| 2.00 | 6 | |||
| 1.50 | 7 | |||
| 1.00 | 8 | |||
| 0.50 | 9 | |||
| 0 | 10 |
Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic.
| price (P)($) | Quantity demanded (Q) | Total Revenue | Marginal Revenue | Price Elasticity of demand (Ed) |
| 5.00 | 0 | |||
| 4.50 | 1 | |||
| 4.00 | 2 | |||
| 3.50 | 3 | |||
| 3.00 | 4 | |||
| 2.50 | 5 | |||
| 2.00 | 6 | |||
| 1.50 | 7 | |||
| 1.00 | 8 | |||
| 0.50 | 9 | |||
| 0.00 | 10 |
