The Lunchbox is one of many options for workers in Lanford, Illinois to get a quick and

tasty meal at reasonable prices. The manager of the restaurant wanted to raise prices

but did not know if the quantity demanded would fall off too much. He decided to raise

prices and wait and see before making the increases permanent. In the first week after

he raised prices on the menu an average of 10%, the restaurant served fewer lunches

but revenue did not fall. Based on this, he decided to keep the new menu.

A. (3 points) Is his demand elastic, unit elastic, or inelastic? EXPLAIN

B. (3points) Would you expect revenue to continue at this level?