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6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Philadelphia. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve Note: You will not be graded on any changes made to this graph. 180 165 1H 135 120 T 105 Total Revenue 90 60 45 T 30 15 T Deman 0 4 8 12 16 20 24 28 32 3 40 44 48 QUANTITY (Bikes)

On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bike Total Revenue 1510 1400 Ш1290 1180 4 1070 740 0 15 30 45 60 75 90 105 120 135 150 165 180 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of bikes is currently $45 per bike, shown as point B on the initial graph. Because the demand between points A and Bis in total revenue per day a $15-per-bike increase in price will lead to In general, in order for a price decrease to cause a decrease in total revenue, demand must be

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