Question: Let's say that volume is not constant from PROBLEM 2 but is relatively inelastic One option is to price it at $20 for a demand

Let's say that volume is not constant from PROBLEM 2 but is relatively inelastic

One option is to price it at $20 for a demand of 5000 units per year. The other

option is to price is at $16 for volume of 5500 units. What is the price elasticity?

How much profit over 2 years would you make under each of the 2 pricing

options in using the costs in Problem 2? Which pricing option would you go

with? Show total profitability.

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