The Captain Candy store (earlier known as Pirate Candy) in Prague, Czech Republic, manufactures unique pirate-themed candy products. Assume that the town currently levies a €1 per-bag tax on all candy products, and the store sells 15,000 bags of candy a year for a price of €15 per bag. Now suppose that the mayor of Prague decides to build a 1:100 wooden model of the town at a cost of €15,000 and display it at the town square. The mayor also wants to raise this amount as additional tax revenue from the Captain Candy store. She has asked three town council members to come up with a plan each to raise the €15,000, and their plans are as follows: Council member Reinhard advises increasing the per-bag tax by €1, Council member Karel advises raising the tax by €1.50 per bag, and Council member Adéla advises reducing the current tax by €0.25 per bag. For each of the three council members’ plans, determine the following:

a. How many bags of candy would need to be manufactured to increase tax revenue by €15,000?

b. What is the price elasticity of demand for Captain Candy if the tax revenue increases by €15,000?

c. What will be Captain Candy’s total revenue if the tax revenue increases by €15,000?