Question

NOTE: please calculate step by step and mention formula as well

Consider the following hypothetical demand schedule for "Tammy Fay" brand Mascara:

Price per pound:	$0	$6	$12	$18	$24	$30	$36
Quantity demanded:	600 lbs	500 lbs	400 lbs	300 lbs	200 lbs	100 lbs	0 lbs

(a) Based on this demand schedule, set up a graph (using excel) of the demand curve and the corresponding total revenue curve.

(b) Calculate the price elasticity of demand for each price range using the midpoints formula.

Answer 1

Elasticity of demand is calculated as:% change in quantity demanded / %change in price]

Price	Demand	%change in Price	%change in quantity demanded	Elasticity of demand	Total Revenue
0	600	-	-	-	0
6	500	600%	17%	0.028	3000
12	400	100%	20%	0.200	4800
18	300	50%	25%	0.500	5400
24	200	33%	33%	1.000	4800
30	100	25%	50%	2.000	3000
36	0	20%	100%	5.000	0

a)

b)