A company doing marketing research finds that a 10percentdecrease inits product's price would create 12 percentincrease in the quantity demanded ofits product.

a. Based on this information, demand for the company's product is

(Click to select)

1. elastic
2. perfectly inelastic
3. unit-elastic
4. inelastic
5. perfectly elastic

.

b. Using this same information, the company should

(Click to select)the price ofits product.

raise

lower

Please explain.