Use the table below to complete the following exercise. Plot the price and quantity data. Indicate the price elasticity value at each price. What happens to the elasticity value as you move down the demand curve? Price $ % Change in Price Quantity Demanded % Change in Quantity 5 100 10 100 80 220 15 66 60 225 20 33 40 233 25 25 20 250 30 30 0 2100 b. Below the demand curve plotted in (a), plot the total-revenue curve, measuring total revenue onthe vertical axis and quantity on the horizontal axis C. Using the data in (b), what would a 10 percent increase in the price of movie tickets mean for the revenue of a movie theatre if the price elasticity of demand was, in turn, -0.1, -0.5, -1.0 and 5.0?
Use the table below to complete the following exercise. Plot the price and quantity data. Indicate the price elasticity value at each price. What happens to the elasticity value as you move down the demand curve? Price $ % Change in Price Quantity Demanded % Change in Quantity 5 100 10 100 80 220 15 66 60 225 20 33 40 233 25 25 20 250 30 30 0 2100 b. Below the demand curve plotted in (a), plot the total-revenue curve, measuring total revenue onthe vertical axis and quantity on the horizontal axis C. Using the data in (b), what would a 10 percent increase in the price of movie tickets mean for the revenue of a movie theatre if the price elasticity of demand was, in turn, -0.1, -0.5, -1.0 and 5.0?
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Use the table below to complete the following exercise. Plot the
| Price $ | % Change in Price | Quantity Demanded | % Change in Quantity |
| 5 | 100 | ||
| 10 | 100 | 80 | 220 |
| 15 | 66 | 60 | 225 |
| 20 | 33 | 40 | 233 |
| 25 | 25 | 20 | 250 |
| 30 | 30 | 0 | 2100 |
b. Below the demand curve plotted in (a), plot the total-revenue curve, measuring total revenue onthe vertical axis and quantity on the horizontal axis
C. Using the data in (b), what would a 10 percent increase in the price of movie tickets mean for the revenue of a movie theatre if the price elasticity of demand was, in turn, -0.1, -0.5, -1.0 and 5.0?
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