At a specific point on the demand curve for backpacks, the elasticity of demand iscalculated to be -1.6.

a.At that point, we would describe demand as

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elastic

inelastic

unit elastic

fully supplied

.

b.If the price of backpacks fell by 10%, the quantity demanded would rise by

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10%

16%

160%

0%

and revenue for the backpack industry would

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rise

fall

remain the same

.

c.If the price of backpacks rose by 20% the quantity demanded would fall by

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20%

32%

1.25%

80%

and revenue for the backpack industry would

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rise

fall

remain the same

.