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The following graph shows the daily demand curve for bikes in Philadelphia. Use the green rectangle (triangle symbols) to compute total revenue at various prices

The following graph shows the daily demand curve for bikes in Philadelphia.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.

Total Revenue01020304050607080901001101203002752502252001751501251007550250PRICE (Dollars per bike)QUANTITY (Bikes)DemandAB

On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike.

Total Revenue025507510012515017520022525027530010600980090008200740066005800500042003400TOTAL REVENUE (Dollars)PRICE (Dollars per bike)

According to the midpoint method, the price elasticity of demand between points A and B is approximately .

Suppose the price of bikes is currently $125 per bike, shown as point B on the initial graph. Because the demand between points A and B is , a $25-per-bike increase in price will lead to in total revenue per day.

In general, in order for a price decrease to cause a decrease in total revenue, demand must be .

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