V2. Assume that in the market for luxury handbags the government is considering imposing a tax in order to increase tax revenue. Government economists have reported that a 10% increase in the price of luxury handbags is expected to cause a 7% reduction in the quantity demanded of luxury handbags. Based on this information what is the price elasticity of demand and what does this imply about the effectiveness of a luxury handbags tax in raising tax revenue?