Question

The following graph shows the daily demand curve for bippitybops in Houston. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve.

Answer 1

Total revenue is defined as the total or aggregate of proceeds to the firm from the sale of a commodity.It can be calculated by multiplying the units of sale with the price.From the second diagram given in the question we can get the Quantity of bippitybops sold per given price.

By multiplying price with quantity we can get total revenue.

price	Total Revenue
40	40*60=2400
60	60*54=3240
80	80*48=3840
100	100*42=4200
120	120*36=4320
140	140*30=4200
160	160*24=3840

Graphically it can be shown as:-

Total revenue against various prices and quantity can be shown as follows:-

According to the midpoint method the price elasticity of demand between point A and B on the initial graph is approximately

Because the price elasticity of demand between points A and B is -0.6 a dollar 20 per bippitybop will lead to decrease in total revenue per day.

In general in order for a price increase to cause a increase in total revenue demand must be less because price and quantity has inverse relation.So both cannot increase.