Question

A. Demand is elastic​ (at all​ prices). B. Demand is inelastic​ (at all​ prices). Your answer is not correct.C. Demand is elastic at all prices above ​$7.00 and inelastic at all prices below ​$7.00. This is the correct answer.D. Demand is elastic at all prices above ​$5.00 and inelastic at all prices below ​$5.00. E. Demand is inelastic at all prices above ​$7.00 and elastic at all prices below ​$7.00. At what price is total revenue​ maximized? Total revenue is maximized when price equals ​$ nothing. ​(Enter your response as a real number rounded to two decimal​ places.)

Answer 1

This question requires a graph which was not provided. I obtained the graph from google. It can be found in the attachment below.

Answer:

a. Demand is elastic at all prices above ​$7.00 and inelastic at all prices below ​$7.00 - option C.

b. Total revenue is maximized when elasticity is equal to one, thus when price equals $7.

Step-by-step explanation:

a. In a case where demand is elastic, an increase in price leads to a decrease in total revenue. However, when demand is inelastic, an increase in price leads to an increase in total revenue.

Thus, demand is elastic at all prices above ​$7.00 and inelastic at all prices below ​$7.00. - option C.

b. Total revenue is maximized when elasticity is equal to one, thus when price equals $7.

Price Quantity Total revenue

0 0 0

2 8 16

4 7 28

6 6 36

8 5 40

10 4 40

12 3 36

14 2 28

16 1 16

18 0 0