🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
928
views

The following graph shows the daily demand curve for bikes in San Francisco.

Q1 On the following graph, plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike.

Q2 According to the midpoint method, the price elasticity of demand between points A and B is approximately......

Q3 Suppose the price of bikes is currently $25 per bike, shown as point B on the initial graph. Because the demand between points A and B is....... , a $25-per-bike increase in price will lead to in total revenue per day.

Q4. In general, in order for a price decrease to cause a decrease in total revenue, demand must be .

 

Watch
1
answer
0
watching
928
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Sonal Bahl
Sonal BahlLv10
4 Dec 2020

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

The following graph shows the daily demand curve for bippitybops in San Francisco.

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.

Graph #1

On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bippitybop.

 

 

Graph #2

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

 

Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops.

Show the effect this shock has on the market for apples by shifting the demand curve, supply curve, or both.

One of the farmers is excited by the price increase caused by the blight because he believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market.

Using the midpoint method, the price elasticity of demand for apples between the prices of $15 and $21 per bushel is (0.67,0.75,1.5,3) , which means demand is (elastic,inelastic,unit elastic) between these two points. Therefore, you would tell the farmer that his claim is (correct, incorrect) because total revenue will (decreases,increase) as a result of the blight.

Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. 

 

14. Application: demand elasticity and agriculture

Consider the market for soybeans. The following graph shows the weekly demand for soybeans and the weekly supply of soybeans. Suppose a spell of unusually good weather occurs, which enables soybean producers to generate more soybeans per acre of land.

Show the effect this shock has on the market for soybeans by shifting the demand curve, supply curve, or both.

One of the growers is concerned about the price decrease caused by the spell of good weather because he feels it will lower the revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market.

Using the midpoint method, the price elasticity of demand for soybeans between the prices of $10 and $6 per bushel is.........., which means that the demand is............between these two points. Therefore you would tell the grower that his claim is...........because total revenue will............as a result of the spell of good weather.

Confirm your conclusion by calculating total revenue in the soybean market before and after the spell of good weather. Enter these values in the following table.

                                                   Before the spell of good weather            After the spell of good weather

Total Revenue(millions of dollars) 

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in