Question: Consider the information in the table below that describes the demand for movie rentals from your on-line supplier Instant Flicks. Price per movie ($)

Consider the information in the table below that describes the demand for movie rentals from your on-line supplier Instant Flicks. Price per movie ($) Quantity demanded 2 3 5 6 7 8 1200 1100 1000 900 800 700 600 Total revenue Elasticity of demand (a) Either on graph paper or a spreadsheet, map out the demand curve. (b) In column 3, insert the total revenue generated at each price. (c) At what price is total revenue maximized? (d) In column 4, compute the elasticity of demand corresponding to each $1 price reduction, using the average price and quantity at each state. (e) Do you see a connection between your answers in parts (c) and (d)?

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