Assume that a lady's hand bag was selling at 800.00in a district comprising 5 stores. After one week, the district manager found only 50 bags were sold. To boost sales, the price of the handbags was reduced by 25%. As a result, sales of those bags increased to 300 in the next week. 

(a). Calculate the price elasticity of demand.

(b). What does the coefficient of elasticity indicate?

(5 points)