1. The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. Which of the following would be the best option for the company? 

Raise the price and plan to increase the quantity supplied.

Lower the price and plan to increase the quantity supplied.

Raise the price and plan to decrease the quantity supplied.

Lower the price and plan to decrease the quantity supplied.

2. Refer to the situation described in question 10. What was total revenue for the past year, in dollars? (Enter as a whole number without the dollar sign.)

3. Refer to the situation described in question 10. Given the price elasticity of -2.5, and the proposed price of $63, what should be the quantity supplied? (Round to the nearest whole number)

4. Refer to the situation described in question 10. What would total annual revenue be at the proposed price of $63? (Enter as a whole number without the dollar sign.)

5. If the company’s belief is correct, would total revenue increase, decrease, or remain the same as a result of the $63 price cut?

Increase

Decrease

Remain the same