The price elasticity of demand is the change in quantity demanded relative to the change in price.
- <em>The second figure in the attached image represents the revenue graph</em>
- <em>The price elasticity of demand is 0.143</em>
- <em>The demand must be inelastic</em>
Let:
<u>(a) The total revenue</u>
From the first graph (see attachment), we have:
The total revenue (T) is calculated using:
So, we have:
<em>The second figure in the attached image represents the revenue graph</em>
<u>(b) Price elasticity of demand</u>
Between points A and B, we have:
The price elasticity of demand is:
So, we have:
<em>The price elasticity of demand between points A and B is 0.143, and the demand must be inelastic because an increase in price of the bike leads to a decrease in the total revenue</em>
Read more about price elasticity of demand at:
brainly.com/question/13380594