John is running a sandwich stand and is facing the following demand curve:
Using the mid-point method, calculate the price elasticity of demand from Point A to Point B. Show the steps of your calculation.
Suppose John operates his sandwich stand at the portion of the demand curve between Points A and B. If John would like to increase total revenue, should he increase or decrease the price? Explain.
Facing keen competition, the Open University of Hong Kong (OUHK) decides to make its programmers more attractive by promising all undergraduates to have internships and job placement services before they graduate. Implementing the new services raises the operating costs and therefore the OUHK increases tuition fees by 15 percent. As a result, student enrollment increases by 25 percent. Is the price elasticity of demand for OUHK programmers elastic, inelastic, or indeterminate? Explain your answer.