You may use a drawing program or sketch by hand. Be sure that your responses model clear economic reasoning and addresses each of the following: 1.) Suppose if the price of a good is $12, the quantity demanded is 50 units; when the price is $10, the quantity demanded is 100 units. Use the midpoint approach to compute the price elasticity of demand. Is demand at this point relatively responsive or relatively unresponsive to price changes? 2.) For this exercise you will need to first build a graph to these specifications: Draw a downward sloping demand curve with vertical intercept (0,4) and horizontal intercept (8,0). Label the price above which the demand is always elastic. Label the portion of the curve at which a decrease in price will lead to increased revenue. If the price is currently $3, will revenue rise or fall if price drops to $2?