AutoTech offers annual vehicle emissions inspections in the Newark New Jersey area. Tests are conducted by mechanics on testing machines sold by one of two producers in the automotive diagnostic industry. Data for the previous year show an average of 12 tests per hour performed on the Dyno300, and 30 tests per hour on the more up to date ESP Emissions Monitor. AutoTech leases all their machines. The Dyno300 lease rate is $8000 per month, and the ESP Emissions Monitor is leased for $18,000 per month. On average, each machine is operated 25 eight-hour days per month. Labor and all other costs are fixed. A. Does AutoTech's current usage reflect an optimal mix of testing equipment? Explain your answer. B. At a price of $5 per test, should the company lease more machines? What recommendation would you make to AutoTech regarding which if any machines should be leased? C. Is there anything else that should be considered before leasing more machines?

D. Given available information, would it be possible to compute the price elasticity of demand?