Suppose that the price of good X rises from $12.00 to $12.90, and as a result the quantity demanded of good X falls from 5,000 units to 4,600 units. The (absolute value of) price elasticity of demand for good X is , indicating that good X is price . This increase in price caused total revenue to .

The price elasticity of demand is 1.14.

The price is Elastic.

Elasticity is more than one so total revenue will fall.

Explanation:

Given the initial price of good x = $12

Final price of good x = $12.90

% change in price = [(12.90 - 12) / 12] x 100 = 7.5 %

Initial quantity = 5000

Final quantity = 4600

% change in quantity = [(4600 - 5000)/5000] x 100 = -8%

Elasticity = % change in quantity / % change in price

Elasticity = 8% / 7%

Elasticity = 1.14

The price elasticity of demand is 1.14.

The price is Elastic.

Since elasticity is more than one so total revenue will fall.

Dr cash                                         $26,000

Dr accumulated depreciation     $28,000

Cr equipment                                                            $52,000

Cr gain on disposal($26,000+$28,000-$52,000) $2,000

b.

Dr cash                                                                $15,000

Dr accumulated depreciation                              $28,000

Dr loss on disposal($15,000+$28,000-$52,000)$9000

Cr equipment                                                                              $52,000

Explanation:

The sale of the equipment for $26,000 means that cash would be debited with $26,000 with accumulated depreciation being written off by debiting accumulated depreciation with $28,000 while the asset account is credited with $52,000 with a difference of $2000 gain credited to gain on disposal of equipment.

The sale of the equipment for $15,000 means that cash would be debited with $26,000 with accumulated depreciation being written off by debiting accumulated depreciation with $28,000 while the asset account is credited with $52,000 with a difference of $9000 loss debited to loss on disposal of equipment