Suppose the initial price and quantity in the market for roses is $10 and 100. That is, at a price of $10, 100 roses are being sold.

As Valentine's day is approaching, the market price increases to $20. This causes the demand for roses to fall to 40.

(a) Calculate the price elasticity of demand for roses using the midpoint formula. Show your steps and box your final answer. (6 points)

(b) Are roses elastic or inelastic? Explain your answer.