Question: Please explain in 75 words or more the following TRUE or FALSE questions. Answers need to be supported with an economic model. a. Your local

Please explain in 75 words or more the following TRUE or FALSE questions. Answers need to be supported with an economic model.

a. Your local corner store tells you that it has increased the price of 'Old Grandma's Pies' because it knows that demand for them is price elastic and that this implies that its revenues will increase.

b. When demand for farm products is price inelastic, farmers' revenues rise in a drought if it results in a price rise because the percentage change in price is larger than the percentage change in quantity demanded.

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