Ritewell sells pens at a current price of $10, producing a revenue of $120,000 per month., of which 20% is spent on advertising. The marketing manager wants to increase sales to 16,000 units per month, and is considering whether to increase advertising or reduce price to achieve this target. He has a estimated that the PED for Ritewell's pens is -1.5 and the AED is 1.8.

Calculate how much would need to be spent on advertising to achieve this target?

Calculate how much of a price cut would need to be made to achieve target the target sales?

Explain which is the better decision in terms of achieving the desired target?