A Pharmaceutical company is contemplating the increase in the price of their vaccines. At a price of $20 per vaccination, the quantity of vaccinations demanded is 10 million per year. When price rises to $21 per vaccination, the quantity demanded falls to 9.9 million vaccinations per year.

a)Calculate the price elasticity of demand

b)Advise the pharmaceutical company if the increase in price will be beneficial to their shareholders

c)Why does it matter whether demand is inelastic, or elastic?