3. After seeing the result (from question 2), Cal decided to lower his price once again to $2.729 per gallon. Once again, volume sold increases and settles at 4,800 gallons per day. He is worried that any further price cut will cause the discount station across the street to also lower its price.

What is the price elasticity of demand?

Can the demand be characterized as price elastic, price inelastic, or neither?

By how much did revenues increase or decrease as a result of the change in price?

By how much did profits increase or decline? (Profits are revenue minus all costs.)

Quantity	Price
Average	Average
% change	% change	Elasticity of Demand
Elasticity:	Select One
By how much did revenues increase or decrease as a result of the change in price?
By how much did profits increase or decline?
Gallons sold per day	Price	Revenue (price x gallons)	Cost per Gallon	Variable Cost (cost per unit x volume)	Fixed cost per day	Total Cost (Fixed + Variable)	Daily Profit (revenue - all costs)
4400
4800