Price Elasticity Regions along a Straight Line Demand Curve Region 1: E | | I Region 2: E | | b/2 b In the above graph, region 1 has an elasticity of =1 1 Cannot be determined Elasticity 18 16 14 12 10 Price Co 4 2 0 5 10 15 20 25 Quantity -Curve 2 -Curve 2 Calculate the elasticity of demand for Curve 2 at P = 4 using the formula E = (P/Q) x (1/slope) 0.33 0.8 5 1.2518 16 14 12 10 Price 8 N 0 5 10 15 20 25 Quantity - Curve 2 -Curve 2 Calculate the elasticity of demand for Curve 1 at P=6 using the formula E = (P/Q) x (1/slope) O 2 2.4 O 0.6 O 3Price of Shoes 120 100 80 Price ($/pair) 60 40 20 2 6 10 12 Quantity (10,000 pair /year) Refer to the graph above and assuming it represents the market, what is the total consumer surplus in the market? O $1,200,000 per year $2,400,000 per year O $400,000 per year O $800,000 per year