Leticia runs a corner delicatessen and decides one Monday morning to raise the prices of her sandwiches by ten percent. Because Leticia knows a little economics, she expects that this price increase will cause her to lose some business because demand curves slope down, but she decides to try it anyway. At the end of the day, Leticia discovers that her revenue has, in fact, gone up in the sandwich department. Feeling pleased with herself, Leticia hires someone to create signs showing the new prices for the sandwich department. At the end of the month, however, she discovers that sandwich revenue is way down.

1. Why do you think that the monthly demand curve might have a different elasticity than the daily demand in the above case?
2. What conclusion can you draw from this economic pattern in the short and in the long run?