Table 1: Pepita Disco Performance, 2011 (UYU in millions)

Units sold	100 million units
Revenue	200
Variable costs
Materials	30
Direct labor(manufacturing,sales)	40
Opearational costs(manufacturing,inventory,delivery)	30
Other variable costs	20
Margin on Sales	80
Fixed Costs
Marketing and advertising	10
Research and development	10
Other fixed costs(e.g head office)	40
Net margin	20

Now, imagine a similar company, called Yuckles Pet Products, which sells more expensive products than Pepita Disco. It has exactly the same revenues, total fixed costs, and total variable costs as Pepita Disco, so its financials look exactly the same except that Yuckles sold 40 million units.

1. What would be the absolute and percentage effect on net margin if Yuckles were to:

a.) Lower its price 10% with an elasticity of 1.7?