A producer sells two products, X and Y, and had recently raised the prices of the two

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Question:

A producer sells two products, X and Y, and had recently raised the prices of the two products. The price and quantity for each product before and after the price change is given in the table below.

Calculate the price elasticity of demand for both products using the midpoint method. Classify X and Y according to their price elasticities of demand and explain two possible reasons why they are different. What should the producer do to the prices of the two products if the objective is to earn more revenue?