The following graph represents demand for graphing calculators at college bookst

Question

The following graph represents demand for graphing calculators at college bookstores in Boston, Massachusetts. Part 1: Last semester, the calculators at the bookstore were priced at $80. The quantity demanded at this price Is represented by point A. Use the quadrilateral tool to Identify the area of total revenue from the sales of calculators label this area TR1. Part 2: This semester, the price of calculators increased to $100. The quantity demanded at this price is represented by point B. Use the quadrilateral tool to identify the area of total revenue from the sale of calculators this semester. Label this area TR2. Part 3: Use the quadrilateral tool to identify the area that represents the price effect of the price increase (from $80 to $100). Label this area PE. Part 4: Use the quadrilateral tool to identify the area that represents the quantity effect of the price Increase (from $80 to $100). Label this area QE.

Explanation / Answer

Part 1. At Price $ 80, Q = 40. Total revenue = P xQ => 80 x 40 => 3200 Whole area under dark pink lines

Part 2. At Price $ 100, Q = 30. Total revenue = P xQ => 100 x 30 => 3000 Whole area under light pink lines

Part 3. Price effect is the area between $ 100 and $ 80

Part 4. Quantity effect is the area between Q = 40 and 30.

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