Explain the relationship between the price elasticity of demand and total revenue.

1. Explain the relationship between the price elasticity of demand and total revenue.

2.    Is the price elasticity of gasoline more elastic over a shorter or a longer period of time?  Explain.

3. Determine whether each of the following is an explicit cost or an implicit cost:

        a) Payments for rented manufacturing equipment

        b) A firm’s use of a warehouse that it owns and could rent to another firm

        c) Wages paid to the firm’s workers

        d) The wages the firm’s owner could earn if he worked for another company