6. Elasticity and total revenue The following graph illustrates the weekly demand curve for motorized scooters in Wilmington. 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. 105 120 165 Total Revenue 150 135 120 105 FRICE (Dollars per scooter) B o 4 & 12 168 20 24 2B 32 35 40 44 48 52 QUANTITY (Scooters) On the following graph, use the green point (triangle symbaol) to plot the weekly total revenue when the market price is $30, $45, 560, $75, 590, 105, and $120 per scooter. A 1220 Total Revenue 120 1040 200 620 TOTAL REW ENUE (Dollars) 430 340 ;r_i_*_*__*__ | | | l 200 i 15 30 45 60 75 0 105 120 135 150 185 180 195 PRICE (Dollars per scooter) o According to the midpoint method, the price elasticity of demand between points A and B is approximately =+ . Suppose the price of scooters is currently $45 per scooter, shown as point B on the initial graph. Because the demand between points A and B is W , a $15-per-scooter increase in price will lead to W in total revenue per week. In general, in order for a price increase to cause a decrease in total revenue, demand must be v