Problem Set 2.6 Stay in School Bumper Stickers After Lucy Lugnut and her friend Diesel dropped out of school, they got into trouble with the law and ended up in prison. When they were released, they decided to capitalize on their newly developed skills in making license plates. They started a new business that made a metal version of bumper stickers that buyers could bolt to their bumpers or hang from their gun racks. It said, "STAY IN SCHOOL! They studied the market and found that if they charged $3.00 they would sell 6,250 $3.50 they would sell 6,125 $4.00 they would sell 6,000 $4.50 they would sell 5,500 $5.00 they would sell 4,500 $5.50 they would sell 3,000 Lucy and Diesel initially put their bumper sticker on the market for $3.50. They can produce any quantity of bumper stickers at a cost of $0.50 each and decided to hire you as a consultant to advise them about pricing. 1. Calculate the total revenue earned at each of the prices listed above. 2. Indicate whether demand is elastic or inelastic for each 50-cent price range between the prices listed above. 3. Would you advise them to raise the price to $4.00 even though they would sell fewer bumper stickers? 4. Would you advise them to lower the price to $3.00 in an effort to sell more? 5. Since Lucy and Diesel are the only providers of these bumper stickers, they can charge any price they choose. What price would you recommend? Why