Revenue at a major cellular telephone manufacturer was $1.4 billion for the nine months ending March 2, up 97 percent over revenues for the same period last year.Management attributes the increase in revenues to a 137 percent increase in shipments, despite a 17 percent drop in the average blended selling price of its line of phones.

a. Given this information, compute the (own) price elasticity of demand.

b. What is the relationship between total revenue and price for this firm, given the price elasticity of demand

computed in a. above.

c. One of the managers expressed surprise at this result and wonders whether an error has been made in the

report.What is your response to the manager?Indicate whether you support the report or support the

manager's view that an error has been made in your explanation.