Summary: Elasticity W GA Table Of Contents X 2.4 A sporting goods store has estimated the demand curve for a popular brand of running Contents Bookmarks Recent shoes as a function of price. Use the diagram to answer the questions that follow. Critical Thinking Questions a. Calculate demand elasticity using the midpoint formula between points A and ( 0 > B, between points C and D, and between points E and F. 6: Household Behavior and Consumer Choice (Part II: The Q b. If the store currently charges a price of $50, then increases that price to $60, Market System) what happens to total revenue from shoe sales (calculate P x Q before and after > 6 Appendix: Indifference Curves the price change)? Repeat the exercise for initial prices being decreased to $40 and $20, respectively. 7: The Production Process: The Behavior of Profit- 10 c. Explain why the answers to a. can be used to predict the answers to b. Maximizing Firms > 7 Appendix: Isoquants and Isocosts 70 60 > 8: Short-Run Costs and Output Decisions AA > 9: Long-Run Costs and Output Decisions Price per pair ($) > 9 Appendix: External Economies and Diseconomies E Demand > 10: Input Demand: The Labor and Land Markets 11: Input Demand: The Capital Market and the Investment 0 100 200 300 400 500 600 Decision Hide