Question: Consider this graph for running shoes below. Note that if the stores manager increases the price from $60 to $70 (16.7%), the quantity demanded would

Consider this graph for running shoes below. Note that if the store’s manager increases the price from $60 to $70 (16.7%), the quantity demanded would fall from 50 to 40 pairs per month (20.0%). What is the elasticity of demand? Is demand elastic, unit elastic, or inelastic? Will the store’s total revenue increase, decrease, or remain unchanged as a result of the price increase?

$80 60 60 Demand Curve for Running Shoes Price 40 20 0

$80 60 60 Demand Curve for Running Shoes Price 40 20 0 Demand 20 20 40 Quantity 60 80

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