Refer to the table below to answer the questions that follow:

Points Price $ Quantity Total Revenue

A 50 100

B 40 200

C 30 300

D 20 400

E 10 500

What is the total revenue at point B?

Calculate the price elasticity of demand between points B and C?

Your friend owns a small business. Based on the principle of price elasticity of demand and total revenue application, justify the recommendation(s) you must give to your friend on whether to increase or decrease prices between the ranges B, C & D along a linear demand as in points A-E. Hint: You are expected to apply the principle of how price elasticity of demand affects total revenue determination.

B.

PRODUCTION & COSTS

Units of Total Marginal Average

Variable FactorProduct Product Product

12

28

52

74

91

104

114

120

121

115

1.Calculate MP and AP

• Identify the stage of increasing and diminishing returns on the table.

• What is the relationship of the MP and AP curves?

• When is TP at a maximum?(use table)