erstanding c Questions Answers A new electric car has a price of E28,000. In a certain market, the PED = . % AP 2300000 - 20000 09 manufacturer sells 2 million of these cars each year. As the 2000000 production technology improves, the price of the car falls to 26000 - 28000 E26,000. As a result, sales of the car increase to 2.3 million 28000 annually. - 14 = -2. 1. State the equation and then use it to calculate the price elasticity of demand for this car. (show all your workings) The change of price 2. Is the demand for the car price elastic, inelastic, or unit change less , Quantity of elastic? Explain your response. demand change more, 2 . 1 > 1 , so it's elastic. 3. Identify the resulting impact on the total revenue for this car producer given the change in price. Explain using elasticity concept and a calculation for your justification. 4. Explain one change in the condition of the marketplace that might result in a decrease in the price elasticity of demand for this car in the long run