Elasticity

Total Revenue Along a Linear Demand Curve

Elasticity

# Total Revenue Along a Linear Demand Curve

Elasticity changes along a linear demand curve!

1

concept

## Total Revenue Along a Linear Demand Curve

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2

Problem

ProblemWhat 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

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

A

$2

B

$3

C

$4

D

$5

4

Problem

ProblemAt what price is revenue maximized?

A

$2

B

$3

C

$4

D

$5