Problem six: E-levy and elasticity of demand for electronic transaction services Consider the following facts about mobile money transactions. Prior to the introduction of the E-levy MTN charged 1% on mobile money transactions up to a total charge of GHS 10 per transaction. After the introduction of the 1.5% E-levy, MIN reduced its charges to 0.75%. a) In ordinary language, explain what it means to say the demand for mobile money transactions is price elastic. b) A deputy minister of finance has suggested that the introduction of the E-levy will reduce mobile money transactions by 24%.' Based on this and information in the http://www.myjoyonline.com/our-research-shows-24-dron-in-mobile-money-transactions-after-e-levy: introduction-john-kumah/ preamble to this question, is the demand for mobile price elastic or price inelastic? Does your answer depend on which mobile network one is using? c) Contrast this with a recent survey by IMANI Ghana which shows a 83. reduction in mobile money transactions since the introduction of the E-levy. Based on this new information, is the demand for E-levy price inelastic or price elastic. d) Discuss the difference between your answers in parts (b) and (c) in terms of the ability of the government to raise revenue from the E-levy. e) The same deputy minister of finance indicated that based on their research, after a while mobile money customers will return to their respective service: "The research we did also told us that there will be about 24 per cent attrition rate in the three months to six months that we will introduce it. The same research told us what should be done to bring back these people after a while, and we have all these things in place" Suppose that the 3-6 months constitute short-run and any period after that constitutes long-run. Based on the minister's statement, is the demand for mobile money services more or less elastic in the short-run compared to the long-run? Is this consistent with what we learned about elasticity in this class? Explain