The demand equation for a cola-type soft drink, in general, is Q = 20 -2P, where Q stands for quantity and P stands for price.
1. Calculate point elasticities at prices of 5 and 9.
2. Is the demand curve elastic or inelastic at these points?
3. Calculate arc elasticity at the interval between P = 5 and P = 6.
4. At which price would a change in price and quantity result in approximately no change in total revenue? Why?
The demand equation for a cola-type soft drink, in general, is Q = 20 -2P, where Q stands for quantity and P stands for price.
1. Calculate point elasticities at prices of 5 and 9.
2. Is the demand curve elastic or inelastic at these points?
3. Calculate arc elasticity at the interval between P = 5 and P = 6.
4. At which price would a change in price and quantity result in approximately no change in total revenue? Why?
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Related questions
Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic. Using the data from the demand schedule, graph the demand curve, the marginal revenue curve, and the total revenue curve. Identify the elastic, unit elastic, and inelastic segments along the demand curve.
| Price (P) | Quantity Demanded (Q) | Total Revenue | Marginal Revenue | Price elasticity of demand |
| $5.00 | 0 | |||
| 4.50 | 1 | |||
| 4.00 | 2 | |||
| 3.50 | 3 | |||
| 3.00 | 4 | |||
| 2.50 | 5 | |||
| 2.00 | 6 | |||
| 1.50 | 7 | |||
| 1.00 | 8 | |||
| 0.50 | 9 | |||
| 0 | 10 |
Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic. Using the data from the demand schedule, graph the demand curve, the marginal revenue curve, and the total revenue curve. Identify the elastic, unit elastic, and inelastic segments along the demand curve.
| Price (P) | Quantity Demanded (Q) | Total Revenue | Marginal Revenue | Price elasticity of demand |
| $5.00 | 0 | |||
| 4.50 | 1 | |||
| 4.00 | 2 | |||
| 3.50 | 3 | |||
| 3.00 | 4 | |||
| 2.50 | 5 | |||
| 2.00 | 6 | |||
| 1.50 | 7 | |||
| 1.00 | 8 | |||
| 0.50 | 9 | |||
| 0 | 10 |
