Answer Happy

1. Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $30 per basketball and $600 when the price is set at $20 per basketball. Without using the midpoint formula, can you tell whether demand is elastic, inelastic, or unit-elastic over this price range? LO6.2 2. What are the major determinants of price elasticity of demand? Use those determinants and your own reasoning in judging whether demand for each of the following products is probably elastic or inelastic: (a) bottled water; (b) toothpaste, (c) Crest toothpaste, (d) ketchup, (e) diamond bracelets, (f) Microsoft's Windows operating system. LO6.3 3. Calculate total-revenue data from the demand schedule in re- view question 1. Graph total revenue below your demand curve. Generalize about the relationship between price elastic- ity and total revenue. L06.2 4. How would the following changes in price affect total revenue? That is, would total revenue increase, decrease, or remain unchanged? LO6.2 PROBLEMS