Question

Any help would be great! My spread sheet is attached

and equations page. Using your spread sheet, type one paragraph answering the following questions: What is the elasticity of demand at $100? Is demand elastic or inelastic at this price? Briefly explain how you know. Will total revenue increase or decrease if price continues to increase? Explain your answer.

Answer 1

Ans:

At price = 100, Elasticity = -0.03509.

Since the absolute value < 1, it is inelastic.

If price rises by 1%, quantity will fall by 0.03509% which means PQ (Revenue) will rise.

Here, total revenue will increase with increase in price.