Due to the impact of Tropical Storm Harry in Caribbean, the price of sugar rises from $0.50 to $1.00 per bag and the quantity demanded falls from 1000 bags to 400 bags
a. Calculate the elasticity of demand for sugar
b. Is sugar elastic, unitary elastic, or inelastic in this price range?
c. What is the interpretation of that price elasticity of demand?
d. If the price of sugar ($1.00) were to increase by 15 per cent, what would be the percentage change in the quantity demanded? [4 marks] e. What happens to total revenue for sugar producers when the price of sugar increases? Explain your answer.