1. Use the figure below to answer the following questions. 16 14- 12 - Demand 10 - Price (dollars) 8 B 6 C 2 0 50 100 200 300 400 Quantity a. Calculate total revenue at points A, B, C, and D. If price falls from $16 to $8, total revenue (increases, decreases, stays the same). If price falls from $8 to $4, total revenue (increases, de- creases, stays the same). If price falls from $4 to $2, total revenue (increases, decreases, stays the same). b. Given your answer in part b, is there any reason to believe this demand curve has a constant price elasticity of demand? Explain.C. Write the equation of this demand curve in the form Q = ap': Q = Since [b| is (greater than, less than, equal to) one, de- mand is (elastic, inelastic, unitary elastic) at every price. d. Compute point price elasticities for prices of $8, $4, and $2. [Hint: Use a straight-edge to construct carefully the appropriate tangent lines. Your tan- gent lines will be approximations since you are constructing them by sight. ] EB= Ec = ED e. Do the point elasticities in part d support your answer in part c? Explain why or why not. Chapter 6: Elasticity and Demand 145