Question# 1-

P 0 3 6 9 121518

Qd 42 35 28 21 14 7 0

A. Take the data above and graph the demand curve. B. Calculate the total revenue (TR) based on the above data (5) C. Graph the TR curve. (5)

Question # 2. Calculate the elasticity of demand (Ed), using the midpoint formula, as price drops from $18 to 15, 15 to 12, 12 to 9, 9 to 6, 6 to 3, and 3 to 0. Show all work.

Question # 3. For each calculation in part # 2 - state: a. if the price is elastic, unitary or inelastic;

b. what portion of the demand curve it is located on (3)

c. what is the relationship between the % change in Qd and the % change in P for each calculation; (You need to specifically address the graphs and calculations you have completed.)

d. For each price, explain what would happen to Qd and to TR, when the price drops. Be sure to reference the Ed formula, the demand curve and the TR curve.(You need to specifically address the graphs and calculations you have completed.)

Question # 4. Starting at the price of $18 and working down the demand curve $3 at a time, explain what is happening to the total revenue at each price and why. You need to relate the TR back to the Ed formula and demand curve and explain. (You need to specifically address the graphs and calculations you have completed.)