Q.1. i. Quick Lube, Inc., provides while you wait oil lubrication services to customers trough the Cleveland, Ohio market. In an effort to expand its customers base, Quick Lube recently offered $5 off its regular $25 price. Customer response was enthusiastic, with sales rising to 1,100 units from 700 units per week.

A. Calculate the arc price elasticity of demand for Quick Ube

services.

B. Assume that the arc price elasticity (from part A) is the

best available estimate of the point price elasticity of demand. Calculate Quick Lube's optimal markup on price.