1. Buy & Large typically sells 800,000 packs of batteries per month. Two months ago, it raised the price of a pack from $5 to $6. Last month it sold 600,000.

a. What was B&L's monthly revenue prior to the price rise? After?

b. What is the price elasticity of demand for B&L's batteries?

c. Is the demand curve for batteries elastic or inelastic between $5 & $6, and why?

d. Suppose that B&L finds a way to make $1 million of profit on batteries per month. How will the market for batteries react to this, and why?