Learn the toughest concepts covered in your Macroeconomics class with step-by-step video tutorials and practice problems.

Elasticity

1

Total Revenue Along a Linear Demand Curve

7m

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2

Problem

Use this graph to answer the following questions.

What is the elasticity of demand when the price of the good changes from $3 to $5?

A

0.25

B

0.50

C

1.00

D

2.00

3

Problem

Use this graph to answer the following questions.

At what price is the elasticity of demand for the product equal to one?

A

$2

B

$3

C

$4

D

$5

4

Problem

Use this graph to answer the following questions.

At what price is revenue maximized?

A

$2

B

$3

C

$4

D

$5