. Assume that the house cleaning business is inelastic, due to the fact that the service is considered a necessity by some families and the price of the service is small compared to a familys total budget. (Recall that elasticity of demand is the percent change in quantity divided by percent change in price. Also, price and quantity will move in opposite directions.) Assume the elasticity of demand for M&M is 0.75 (any number below 1 is inelastic). So, if elasticity is 0.75 and the price is raised by 10%, then the quantity of customers is reduced by 7.5% (the 0.75 ratio holds). If M&M raises its prices by 20%, calculate the following: a. Price per contract b. Quantity of customers c. Revenue from cleaning contracts d. Contribution Margin e. Breakeven Quantity (BEQ) f. Profit from cleaning contracts g. Comparison of before (raising price) and after (raising price) profit h. What other benefits might M&M realize if raising the price?

a.Price per contract

b. Quantity of customers

c. Revenue from cleaning contracts

d. Contribution Margin

e. Breakeven Quantity (BEQ)

f. Profit from cleaning contracts

g. Comparison of before (raising price) and after (raising price) profit

h. What other benefits might M&M realize if raising price?