Homework (Ch 05) Attempts Average/4 6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Diego 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. 300 275 250 Total Revenue 225 200 175 E (Dollars per bike 150 125 300 275 250 Total Revenue 225 + 200+ 175 PRICE (Dollars per bike) 150 + 125 100 75 50 *4 B 25 + Demand 0 81 90 27 108 99 0 g 18 36 45 54 63 72 QUANTITY (Bikes) On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, 575, 5100, $125, $150, $175, and $200 per bike, 9540 8820 Total Revenue 8100 7380 6660 TOTAL REVENUE (Dollars) 5940 5220 4500 3780 3060 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately Support the price or bikes is currently $25 per bike, shown as point B on the initial graph. Because the demand between points A and B is $25-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