Econ 202 Study Guide Dr. TickCh. 5 Elasticity T

Econ 202 Study Guide Dr. TickCh. 5 Elasticity
The questions below have the answers in the notes or the book chapter. Work them all and let me know if you have any questions.
From the textbook: review the chapter answer all the Questions for Review at the end of the chapter as well as Problems and Applications: 2 6 8 10.1. For the table below:
a. Calculate the price elasticity of demand for the following consecutive changes in prices and indicate whether the demand is elastic (E) unit elastic (UE) or inelastic (I).
Price Quantity demanded Total revenue Elasticity of demand E UE or I 1.00 30 0.90 40 0.80 50 0.70 60 0.60 70 0.50 80 0.40 90 b. What is the relationship between total revenue and the price elasticity of demand? Explain.2. If at the current price demand is elastic how can a seller increase total revenues (TR=P*Q) by increasing price or decreasing price? Justify your answer.3. If at the current price demand is inelastic how can a seller increase total revenues (TR=P*Q) by increasing price or decreasing price? Justify your answer. a. Provide a brief definition of the price elasticity of demand.
b. Provide an explanation for why the sign of the coefficient of price elasticity of demand is always negative.
c. Explain what is the interpretation of a price elasticity of demand epd

Attachments: