Name:Angeline M.

Sumaoy
Subject: The Contemporary World
Date: 10/092020

Elasticity Problem: Fill out the TR and ELASTICITY columns. Show your
solutions. (18 points)
 

PRICE QD TR ELASTICITY (computed value)

5 2,000 10,000 -5
4 4,000 16,000 -3
3 7,000 21,000 1.71
2 11,000 22,000 -0.90
1 16,000 16,000

SOLUTIONS BELOW

5 x 2,000 = 10,000→ Total Revenue

4 x 4,000 = 16,000→ Total Revenue
3 x 7,000 = 21,000→ Total Revenue
2 x 11,000 = 22,000→ Total Revenue
1 x 16,000 = 16,000→ Total Revenue

A.) P1= 5 (4,000-2,000)/2,000 = 2,000/2,000 = -5

P2= 4 (4-5)/5 -1/5 (Elastic)
Q1= 2,000
Q2= 4,000
B.) P1= 4 (7,000-4,000)/4,000 = 3,000/4,000 = -3
P2= 3 (3-4)/4 -1/4 (Elastic)
Q1= 4,000
Q2= 7,000

C.) P1= 3 (11,000-7,000)/7,000 = 4,000/7,000 = 1.71

P2= 2 (2-3)/3 -1/3 (Elastic)
Q1= 7,000
Q2=11,000

D.) P1= 2 (16,000-11,000)/11,000 = 5,000/11,000 =

-0.90
P2= 1 (1-2)/2 -1/2 (Inelastic)
Q1= 11,000
Q2= 16,000