The table below shows the demand schedule for coffee:

Price (dollars per pound) Quantity demanded (millions of pounds per year)

10 30

15 25

20 20

25 15

(a)Calculate the elasticity of demand for a rise in price from 10 dollars per pound to 15 dollars per pound and describe the elasticity of demand for coffee in this price range (i.e. elastic, inelastic, or unit elastic).

(b)Calculate the elasticity of demand for a rise in price from 20 dollars per pound to 25 dollars per pound and describe the elasticity of demand for coffee in this price range (i.e., elastic, inelastic or unit elastic).

(c)Use the total revenue test to determine whether the elasticity of demand for coffee will be elastic, inelastic or unit elastic for a coffee price increase from 15 cents per pound to 20 cents per pound.

(d)Explain the circumstances under which raising the price of coffee will be beneficial, in total revenue terms, to the coffee sellers.