1.What if the monthly total revenue from product A is $52,500 and that of product B is $85,250; own-price elasticity of demand for product A is -1.00; own-price elasticity of B is -0.85; and the cross-price elasticity of demand between products A and B, EQ_A, P_B = EQ_B, P_A = 1.92.

a.If the price of product A is increased by 2.5%, determine the impact of this price increase on monthly total revenue from both products. Clearly show the steps and manual (hand and calculator) calculations.

b.What is the relationship between A and B in consumption? Carefully explain with an example.

c.Suppose there is no relationship between A and B in consumption, i.e., A and B are independent of each other in consumption, how would the answer in (a) be different?

d.Graphically illustrate and explain the rationale for the answer in (c).