Moe's Sporting Goods has a surplus of Dunloptennis rackets. As a result, they lower the price of this racket from $150 each to $125 each. As a result, sales of the Dunlopracket increase from 20 per month to 50 per month.

Questions:

(a) Calculate the price elasticity of demand for the Dunlopbrand of tennis racket. Please show your work...(3 marks)

(b) Is the demand for the Dunlopracket elastic or inelastic? Please explain...(2 marks)

(c) Tom Chan, manager of the store, decides to increase the price of the rackets in order to maximize total revenue. Is this a good idea? Please explain... (4 marks