How the elasticity changes as price increases


Task: Demand Schedule for Barbeque Dinners

Price

Quantity Demanded

 

 

Total Revenue

Elasticity Coefficient

Elastic or Inelastic

$4

100

 

 

__________

XXXX

XXXX

6

80

 

 

__________

__________

__________

8

60

 

 

__________

__________

__________

10

40

 

 

__________

__________

__________

12

20

 

 

__________

__________

__________

14

1

 

 

__________

__________

__________


Question 1. Calculate the total revenue for each level of demand.

Question 2. Using the midpoints formula presented in the text, calculate the elasticity coefficient for each price level, starting with the coefficient for the $4 to $6 level. For each coefficient, indicate what type of elasticity is indicated, elastic demand, inelastic demand, or unitary demand.

Question 3. Define elastic, inelastic, and unitary elasticity means. How are these ?related to total revenue?

Question 4. Explain how the elasticity changes as price increases. Why is this happening?

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Microeconomics: How the elasticity changes as price increases
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