Use the following graph for Yolanda's Frozen Yogurt Stand to answer the questions on the next page.

a. Use the midpoint formula to calculate the price elasticity of demand for D1 between point A and point C and the price elasticity of demand for D2 between point A and point B. Which demand curve is more elastic, D1 or D2? Briefly explain.
b. Suppose Yolanda is initially selling 200 cones per day at a price of $3.00 per cone. If she cuts her price to $2.50 per cone and her demand curve is D1, what will be the change in her revenue? What will be the change in her revenue if her demand curve is D2?

Transcribed Image Text:

Price (dollars per cone) A $3.00 в 2.50 D1 D2 Quantity (cones per day) 200 225 300