A sporting goods store has estimated the demand curve for a popular brand of running shoes as a function of price. Use the diagram to answer the questions that follow. Calculate demand elasticity...

A sporting goods store has estimated the demand curve for a popular brand of running shoes as a function of price. Use the diagram to answer the questions that follow.

1.  Calculate demand elasticity using the midpoint formula between points A and B, between points C and D, and between points E and F.


2.  If the store currently charges a price of $50, then increases that price to $60, what happens to total revenue from shoe sales (calculate P * Q before and after the price change)? Repeat the exercise for initial prices being decreased to $40 and $20, respectively.

Extracted text: 70 60 A 50- B 40 30 20 E Demand 10 100 200 300 400 500 600 Shoe sales per week Price per pair (S)