You sell small pizza's at music festivals during the summer. You drop the price of pizza from $8 to $6 and the quantity demanded rises from 800 to 1,200 per day.

1. Calculate the price elasticity of demand for pizza using the midpoint method (2 marks).
2. Does your revenue increase or decrease?Calculate and explain based on whether the calculated price elasticity of demand is elastic or inelastic (3 marks).