Elasticity of demand
Suppose the price of orange increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.
a- What is the price elasticity of demand?
b- Is the demand elastic, inelastic or unit elastic?
c- If the price of orange were to decrease by 30 percent, what would be the percentage change in the quantity demanded?
d- According to your estimate, what happened to the orange revenue after the price increase? Explain.