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Macroeconomics: Elasticity, Demand, and Total Revenue

Prepare an analysis by answering the questions below. Be sure to cite your references using APA format.

Demand Schedule for Barbeque Dinners

Price Quantity Demanded Total Revenue Elasticity Coefficient Elastic or Inelastic
$4 100
__________ XXXX XXXX
6 80
__________ __________ __________
8 60
__________ __________ __________
10 40
__________ __________ __________
12 20
__________ __________ __________
14 1
__________ __________ __________

Calculate the total revenue for each level of demand.

Using the midpoints formula presented in the text, calculate the elasticity coefficient for each price level, starting with the coefficient for the $4 to $6 level. For each coefficient, indicate what type of elasticity is indicated, elastic demand, inelastic demand, or unitary demand.

Define elastic, inelastic, and unitary elasticity means. How are these related to total revenue?

Explain how the elasticity changes as price increases. Why is this happening?

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Demand Schedule for Barbeque Dinners
Price Quantity Demanded Total Revenue Elasticity Coefficient Elastic or Inelastic
$4 100 __________ XXXX XXXX
6 80 __________ __________ __________
8 60 __________ __________ __________
10 40 __________ __________ __________
12 20 __________ __________ __________
14 1 __________ __________ __________

A. Calculate the total revenue for each level of demand.
See the following table for calculations.

Total Revenue = Price * Quantity Demanded
Price Quantity Demanded Total Revenue Elasticity Coefficient Elastic or Inelastic
$4 100 $400 XXXX XXXX
6 80 $480 -0.56 Inelastic
8 60 $480 -1.00 Unitary
10 40 $400 -1.80 Elastic
12 20 $240 -3.67 Elastic
14 1 $14 ...

Solution Summary

Elasticity, Demand, and Total Revenue are determined. This solution defines the terms elastic, inelastic and unitary elasticity and how they relate to total revenue. The solution also explains how the elasticity changes as price increases. The total solution is 513 words.

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