1. Given the following points on a single demand curve:

Pt. A: price = $36,000, quantity = 0

Pt. B: price = $30,000, quantity = 3

Pt. C: price = $24,000, quantity = 6

Pt. D: price = $18,000, quantity = 9

Pt. E: price = $12,000, quantity = 12

Pt. F: price = $6,000, quantity = 15

Pt. G: price = $0, quantity = 18

Using the midpoints formula, solve for the elasticity

1. Between points A and B
2. Between points B and C
3. Between points C and D
4. Between points D and E
5. Between points E and F
6. Between points F and G
7. Identify the points that are elastic, unitary elastic, and inelastic

If price went up from $6,000 to $18,000, did sales (or revenue) increase

2. Fill in the blanks : Elastic or inelastic

1. e = - 0.9 is more ______ then e = - 0.4
2. e = - 0.2 is more ______ then e = - 0.8
3. e = - 1.0 is more ______ then e = - 1.4
4. a. elasticity = - 1.5. Price decreased by 2%. What happened to Quantity? (increased or decreased or stay the same) and at what %?
5. b. Price increased by 3% and Quantity changed by 1.5%

What is the elasticity value?

Did quantity increase or decrease?

4. Suppose the seller in Question 1 above has current price located on the demand curve segment between E and F. He then decides to lower the price.

What happened to sales (or revenue after this price change?

Two demand curves (D1 and D2) intersect at price = $60 and Quantity = 100. When price dropped to $40, D1 quantity increased to 120. For D2, a drop in price to $40 resulted in a Quantity increase to only 115.

1. Using the values given solve for the elasticities of D1 and D2.
2. In terms of elasticity, we can say that D1 is more ______ than D2
3. Which demand curve is flatter?