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The following graph illustrates the weekly demand curve for motorized scooters in Madison. Use the green rectangle (triangle symbols) to compute total revenue at various
The following graph illustrates the weekly demand curve for motorized scooters in Madison. 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. 260 240 22 Total Revenue 200 180 160 140 120 100 + N PRICE (Dollars per scooter) Demand . 0 9 1B 27 35 45 54 63 72 81 90 99 108 117 QUANTITY (Scooters) On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $40, $60, $80, $100, $120, $140, and $160 per scooter. @ 5120 7 N 4800 + Total Revenue 4480 + 4160 + 3840 + 3520 + 3200 + TOTAL REVENUE (Dollars) 2880 + 2560 + 2240 + 0 20 40 B0 B0 100 120 140 160 180 200 230 240 260 PRICE (Dollars per scooter) According to the midpoint method, the price elasticity of demand between points A and B is approximately v . Suppose the price of scooters is currently $80 per scooter, shown as point A on the initial graph. Because the demand between points A and B is w , a $20-per-scooter decrease in price will lead to W in total revenue per week. In general, in order for a price decrease to cause a decrease in total revenue, demand must be v
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