ECON 100 Elasticity Answers

St. Charles Community College
Econ 100      Survey Economics
Class Handout Problem Answers

Part a:
Complete the following chart:

Price 
Quantity Demanded
 Total Revenue 
Elasticity Coefficient
Elasticity(in words)
 As price rises, TR is:
$1
55
55
 ---------------
---------------
-------------
$3
45
135
-.20
Inelastic
Rising
$5
35
175
-.50
Inelastic
Rising
$7
25
175
-1.00
 Unit Elastic
Constant
$9
 15
135
-2
Elastic
 Falling
$11
 5
55
-5
Elastic
Falling

 

Part b:
Based on the calculations shown in the last two columns, what can you say about the link between total revenue and price elasticity?

Answer:

  • In the inelastic portion of the curve, total revenue is rising as the quantity demanded is decreasing and the price is rising.
  • In the elastic portion of the curve, total revenue is falling as the quantity demanded is decreasing and the price is rising.
  •