Question: Assume that the current price is $296 and the current quantity is 1725.

1. Compute the point price elasticity of demand.
2. Using the definition of price elasticity we get
   \[\varepsilon =\frac{\Delta (%Q)}{\Delta \left( %P \right)}\text{ }\Rightarrow \text{ }\Delta (%Q)=\varepsilon \Delta \left( %P \right)=-1.84601\times (-5)=9.23\]
   This means that the quantity increases is 9.23%, which means it increases to approximately Q = 1,884
3. Is the total revenue expected to rise or to fall as a result of the price cut?

Price: $2.99

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