Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve.
Note: You will not be graded on any changes made to this graph.
Total Revenue
0
10
20
30
40
50
60
70
80
90
100
110
120
300
275
250
225
200
175
150
125
100
75
50
25
0
PRICE (Dollars per bippitybop)
QUANTITY (Bippitybops)
Demand
A
B
50, 175
On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bippitybop.
Total Revenue
0
25
50
75
100
125
150
175
200
225
250
275
300
10600
9800
9000
8200
7400
6600
5800
5000
4200
3400
TOTAL REVENUE (Dollars)
PRICE (Dollars per bippitybop)
200, 8375
According to the midpoint method, the price elasticity of demand between points A and B on the initial graph is approximately    .
Suppose the price of bippitybops is currently $125 per bippitybop, shown as point B on the initial graph. Because the price elasticity of demand between points A and B is    , a $25-per-bippitybop increase in price will lead to    in total revenue per day.
In general, in order for a price decrease to cause a decrease in total revenue, demand must be    .

To compute total revenue at various prices along the demand curve, we use the following formula:

\[
\text{Total Revenue (TR)} = \text{Price} \times \text{Quantity}
\]

Given that you are asked to compute total revenue at prices such as $50, $75, $100, $125, $150, $175, and $200 per bippitybop, and given the quantity associated with each price (based on the demand curve), we can calculate total revenue at each price point. Let's assume the demand curve tells us the corresponding quantities for each price.

To calculate total revenue at each price:

1. **Price: $50**  
   Quantity: 175 (based on the point A you mentioned)  
   Total Revenue:  
   \[
   50 \times 175 = 8,750
   \]

2. **Price: $75**  
   Quantity: (We need the quantity at $75 from the demand curve; let's say it's 140, for example)  
   Total Revenue:  
   \[
   75 \times 140 = 10,500
   \]

3. **Price: $100**  
   Quantity: (Similarly, assuming a quantity of 100 at this price)  
   Total Revenue:  
   \[
   100 \times 100 = 10,000
   \]

4. **Price: $125**  
   Quantity: (Given point B on the graph is $125 and the quantity is 50)  
   Total Revenue:  
   \[
   125 \times 50 = 6,250
   \]

5. **Price: $150**  
   Quantity: (Assuming a quantity of 30 at this price)  
   Total Revenue:  
   \[
   150 \times 30 = 4,500
   \]

6. **Price: $175**  
   Quantity: (Using quantity 20 at this price from your demand curve)  
   Total Revenue:  
   \[
   175 \times 20 = 3,500
   \]

7. **Price: $200**  
   Quantity: (At point B on the second graph, the price is $200 and the quantity is 0)  
   Total Revenue:  
   \[
   200 \times 0 = 0
   \]

### Elasticity Between Points A and B:
You also mentioned the **midpoint method** for calculating elasticity between points A and B. The formula for elasticity using the midpoint method is:

\[
E_d = \frac{(Q_2 - Q_1)}{(Q_2 + Q_1)/2} \div \frac{(P_2 - P_1)}{(P_2 + P_1)/2}
\]

Substituting the values from points A (Price = $50, Quantity = 175) and B (Price = $125, Quantity = 50):

\[
E_d = \frac{(50 - 175)}{(50 + 175)/2} \div \frac{(125 - 50)}{(125 + 50)/2}
\]

Solving this will give the approximate elasticity between these two points.

### Effects on Total Revenue:
If the price increases from $125 to $150 (a $25-per-bippitybop increase), and assuming the price elasticity of demand is greater than 1 (elastic), total revenue will decrease. This is because with elastic demand, total revenue moves in the opposite direction of price changes.

### General Rule for Price and Revenue:
- If **demand is elastic**: A **price decrease** will **increase total revenue**.
- If **demand is inelastic**: A **price decrease** will **decrease total revenue**.

Would you like a detailed solution for the elasticity calculation, or any of the assumptions clarified?

### Related Questions:
1. How do changes in elasticity affect total revenue?
2. What happens to total revenue when demand is inelastic?
3. Can you explain the relationship between the midpoint method and elasticity?
4. How do price changes affect different points on the demand curve?
5. What factors could shift the demand curve for bippitybops?

### Tip:
Remember that total revenue maximizes when demand transitions from elastic to inelastic. Understanding the elasticity at various points on the demand curve helps predict revenue behavior!

Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bippitybop. According to the midpoint method, the price elasticity of demand between points A and B on the initial graph is approximately __. Suppose the price of bippitybops is currently $125 per bippitybop, shown as point B on the initial graph. Because the price elasticity of demand between points A and B is __, a $25-per-bippitybop increase in price will lead to __ in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be __.

Learn how to compute total revenue at various price points on the demand curve and calculate the price elasticity of demand using the midpoint method. The problem provides a practical application of economics concepts such as revenue maximization and demand elasticity.

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