A 1 B C D E F G 2. After seeing your analysis, Cal decides to lower the price of gas to $2.739 per gallon. After this change, the volume sold increased to 4,400 gallons per day. He asks you to measure his business gains or losses as a result of this price change. Fixed costs are $250 per day 2 3 Quantity 4400 4000 Average Price 2.739 2 749 Average 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.) % change 10.000% % change 0363% Elasticity of Demand 27.540 Elasticity: Price Elastic By how much did revenues increase or decrease as a result of the change in prid By how much did profits increase or decline? S 4 .00 0 550 Gallons sold per day Price Revenue (pricex gallons) Cost per Gallon Variable Cost cost per unite volumel Fixed cost per Total Cost d dy 3600 4400 Answer question 3 below. Quantity Price 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 Avene Average change chance Elasticity of Demand 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.) 03 64 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? Variable Cost cost per units Fixed cost per Total Cost Valable Gallons sold per Revenue (price gallons Cost per Gallon Price day