1. Buy & Large typically sells 800,000 packs of batteries per month. Two months ago, it raised the price of a pack from

[answerhappygod]

1. Buy & Large typically sells 800,000 packs of batteries
per month. Two months ago, it raised the price of a pack from $5 to
$6. Last month it sold 600,000.
a. What was B&L’s monthly revenue prior to the price rise?
After?
b. What is the price elasticity of demand for B&L’s
batteries?
c. Is the demand curve for batteries elastic or inelastic
between $5 & $6, and why?
d. Suppose that B&L finds a way to make $1 million of profit
on batteries per month. How will the market for batteries react to
this, and why?
e. When this happens, how does that affect the price elasticity
of demand that B&L faces for its batteries?
f. How much profit does B&L make in equilibrium? Why?
g. Is B&L able to continue paying its workers at this point?
Why or why not?
h. What is the elasticity of B&L’s demand curve for
batteries in general equilibrium?
i. In this situation, what would happen to quantity demanded if
B&L raised its price by $1?