1. Graph the accompanying demand data, and then use the midpoint formula for Ed to determine price elasticity
of demand for each of the four possible P1 price changes.
6
Quantity
Demanded
1
2
3
4
5
5
4
PRICE
Product
Price
5
4
3
2
1
3
2
1
0
0
1
2
3
4
5
6
QUANTITY DEMANDED
2. Calculate total-revenue data from the demand schedule in question 1. Graph total revenue below your
demand curve. Generalize about the relationship between price elasticity and total revenue.
Quantity
Demanded
1
Price
Elasticity
Total
Revenue
(5 x 1) = 5
3
4
2
3
3
2
4
(4 x 2) = 8
1.4
(3 x 3) = 9
0.71
5
8
6
4
2
0
(2 x 4) = 8
0.33
1
TOTAL REVENUE
10
Product
Price
5
(1 x 5) = 5
0
1
2
3
4
QUANTITY DEMANDED
5
6