The table below illustrates the demand and supply for bicycles.

Price	Quantity Demanded	Quantity Supplied
$12	50	36
15	40	40
18	32	48
21	28	56
24	24	70

1. What is the price elasticity of demand for bicycles between a price of $15 and a price of $18? Is demand price elastic or price inelastic in this range?

2. Based on your answer to part 3a, would a bicycle seller be able to increase revenue by raising the price of a bicycle from $15 to $18? Explain using the price elasticity that you calculated.

3. Test this result by actually calculating total revenue amounts:

• What is Total Revenue (TR) when P=$15?
• Using the quantity demanded, what is TR when P=$18? (Recall TR=P x Q).Does Total Revenue increase or decrease as you increase price from $15 to $18?
• Is this the same result you got based on the Price Elasticity of Demand in part B? (If it is not, go back and check your work.)
• Why is it important to know the price elasticity of demand when considering price changes for a product?