Safari File Edit View History Bookmarks Window Help ng.cengage.com MindTap plia

Question

Safari File Edit View History Bookmarks Window Help ng.cengage.com MindTap plia Homework Elasticity and its Application 3540 3160 2780 2400 2020 1640 0 20 40 60 80 100 120 140 163 180 200 220 240 PRICE (Dolars per bippltyoop) According to the midpoint method, the price elesticity of demand between points A and B is approximately o Suppose the price of bpoitybops s curmently $100 per bippitybop, shown as point A on the insitial graph. Because the price elasticity of demand between points A and Bs between points A wnd en ports A ind B s- --, a S20-per-bpptybop decrease n price wil lead to in total revenue per day. In general, in order for a price increase to cause an increase in total revenue, demand must be

Explanation / Answer

Answer :

As Points A and B are not marked in the question, the price elasticity of demand is considered to be as "zero".

Further, According to Mid point method :

Price elasticity of demand = New price of the commodity - Old price of the commodity

------------------------------------------------------------------------------------- * 100

Old price of the commodity

Also., for second point , the price of bippitybops is $ 100 per bippitybops, the price elasticity of demand is "zero",

, a $20 decrease in price will lead to decrease in total revenue perday.

In general, in order for a price increaseto cause increase in total revenue, demand must be inelastic.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.