Homework (Ch 05) 6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Philadelphia. 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. 240 220 200 Total Revenue 180 160 140 PRICE (Dollars per bike) 120 A 100 B 80 60 40 20 Demand 12 60 66 72 0 6 8 24 30 36 42 48 54 QUANTITY (Bikes)Homework (Ch 05) On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $40, $60, $80, $100, $120, $140, and $160 per bike. 4190 3900 Total Revenue 3610 320 3030 TOTAL REVENUE (Dollars) 2740 2450 2160 1870 1580 0 20 40 60 80 100 120 140 160 180 200 220 240 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of bikes is currently $80 per bike, shown as point B on the initial graph. Because the demand between points A and B is , a $20-per-bike increase in price will lead to in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be