Question 2 (Equilibrium) A store in downtown San Francisco is debating whether to have a sale (decrease prices) on shoes this coming holiday season. The owner remembers that in 2017 the sale on shoes increased her revenue from shoe sales. In 2018, the shoe sale caused a decrease in revenues from shoe sales.

a) What can we conclude about the price elasticity of demand in 2017? Briefly explain.

b) What can we conclude about the price elasticity of demand in 2018? Briefly explain.