Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

Exercise 3

Suppose John, the owner-manager of a local hotel projects the following demand for his rooms:

a. Calculate the price elasticity of demand between $90 and $110.
b. Is the price elasticity of demand between $90 and $110 elastic, unit elastic, or inelastic?
c. Will John's total revenue rise if he increases the price from $90 to $110?
d. Calculate the price elasticity of demand between $110 and $130.
e. Is the price elasticity of demand between $110 and $130 elastic, unit elastic, or inelastic?
f. Will John's total revenue rise if he increases the price from $110 to $130?