The following graph shows the daily demand curve for bippitybops in Detroit. Use the green rectangle...

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

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.

On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bippitybop.

According to the midpoint method, the price elasticity of demand between points A and B is approximately (0,0.54,1.86,14) .

Suppose the price of bippitybops is currently $45 per bippitybop, shown as point B on the initial graph. Because the price elasticity of demand between points A and B is ( elastic, inelastic, unit elastic) , a $15-per-bippitybop increase in price will lead to (a decrease, an increase, no change) in total revenue per day.

In general, in order for a price decrease to cause a decrease in total revenue, demand must be (elastic,inelastic,unit elastic) .

Solutions

Expert Solution

Rahul Sunny answered 2 years ago

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