Chapter 19 How Elasticity of Demand Affects Total Revenue

Class Discussions Questions

  

1. Use the following demand schedule to depict how elasticity of demand changes over the demand curve and 
how differing elasticity affect total revenue.

Demand Schedule

Price Quantity
9 800
8 1000
7 1200
6 1400
5 1600
4 1800

2. How can Darin Jones use the information presented in this chapter when pricing the products sold in 
Darin's Music Emporium? Assume the majority of his customers will
be teenagers and young adults 
interested in a variety of music software (cassettes, tapes, and disks) and other items such as posters.

 

 

 

 

3. Explain the concept of cross elasticity of demand as it relates to a product sold at the Emporium.

 

 

 

 

4. Contrast normal and inferior goods. Give examples of each type of good that may be sold at the Emporium.

 

 

 

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