You are the manager for Papa John's and know the following elasticities: = 1.5 I = 1.2 xy1 = 0.5 xy2 = -0.5 is the price elasticity of demand for Papa John's (PJ) cheese pizza, xy1 is the cross elasticity of demand between PJ cheese pizza and Pizza Hut's (PH) cheese pizza, xy2 is the cross elasticity of demand between PJ cheese pizza and PJ breadsticks, and I is the income elasticity of PJ cheese pizza.

a) If you want to increase your sales of PJ cheese pizza by 30%, in what direction and by how much do you need to change the price?

b) If you make the percentage price change that you calculated in part a) will total revenue increase or decrease? How do you know?

c) Pizza Hut lowers its price of cheese pizza by 20%. The demand for Papa John's cheese pizza will change by what percentage and in what direction?

d) Papa John's raises the price of its breadsticks by 15%. The demand for Papa John's cheese pizza will change by what percentage and in what direction?

e) If average income increases by 5% by what percentage and in what direction will the demand for Papa John's cheese pizza change? Are PJ cheese pizzas a normal good or an inferior good and how do you know?