Micro Economics

1) Calculate total-revenue data from the demand schedule. Graph total revenue below your demand curve. Generalize about the relationship between price elasticity and total revenue.


2)
Product price Quantity Demanded
  $5                  1
  $4                  2
  $3                  3
  $2                  4
  $1                  5

Graph the accompanying demand data, and then use the midpoint formula for Ed to determine price elasticity of demand for each of the four possible $1 price changes. What can you conclude about the relationship between the slope of a curve and its elasticity? Explain in a nontechnical way why demand is elastic in the Northwest segment of the demand curve and inelastic in the southeast segment.