Let's say that initially a firm's customers buy 300 textbooks at $50 each, so total

expenditure (revenue to the firm) = 300 x $50 = $15,000. The firm is considering raising

the price by 5%.

1. If demand is elastic (say, -1.5), compute the new total revenue to the firm. Do you

suggest this firm to raise the price by 5%?

2. If demand is inelastic (say, -0.5), compute the new total revenue to the firm. Do you

suggest this firm to raise the price by 5%?

3. If demand is unit elastic, compute the new total revenue to the firm. Do you suggest

this firm to raise the price by 5%?