Credit Sprint / Practice problems / Total revenue and elasticity
Total revenue and elasticity practice problems
Microeconomics Unit 2. Try each one, then open the worked solution. The Credit Sprint app generates unlimited new versions with fresh numbers.
A store changes its price from $13 to $14, and sales go from 560 to 430 units. By how much does total revenue change? (Use a negative number for a decrease.)
Show solution
New TR = $14 × 430 = $6,020. Old TR = $13 × 560 = $7,280. Change = $-1,260. Price and TR moved in opposite directions, so demand is elastic here.
A store changes its price from $24 to $25, and sales go from 640 to 560 units. By how much does total revenue change? (Use a negative number for a decrease.)
Show solution
New TR = $25 × 560 = $14,000. Old TR = $24 × 640 = $15,360. Change = $-1,360. Price and TR moved in opposite directions, so demand is elastic here.
A store changes its price from $19 to $17, and sales go from 290 to 350 units. By how much does total revenue change? (Use a negative number for a decrease.)
Show solution
New TR = $17 × 350 = $5,950. Old TR = $19 × 290 = $5,510. Change = $440. Price and TR moved in opposite directions, so demand is elastic here.
A store changes its price from $20 to $25, and sales go from 720 to 580 units. By how much does total revenue change? (Use a negative number for a decrease.)
Show solution
New TR = $25 × 580 = $14,500. Old TR = $20 × 720 = $14,400. Change = $100. Price and TR moved together, so demand is inelastic here.
A store changes its price from $22 to $21, and sales go from 790 to 940 units. By how much does total revenue change? (Use a negative number for a decrease.)
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New TR = $21 × 940 = $19,740. Old TR = $22 × 790 = $17,380. Change = $2,360. Price and TR moved in opposite directions, so demand is elastic here.
A store changes its price from $19 to $17, and sales go from 670 to 810 units. By how much does total revenue change? (Use a negative number for a decrease.)
Show solution
New TR = $17 × 810 = $13,770. Old TR = $19 × 670 = $12,730. Change = $1,040. Price and TR moved in opposite directions, so demand is elastic here.