Essay
Consider the following demand curve for Starbucks coffee. 
(a) Suppose the current price is $8 per cup. Using elasticity of demand, explain why Starbucks should not increase the price in order to increase total revenue.
(b) Suppose the current price is $2 per cup. Using elasticity of demand, explain why Starbucks should not lower the price in order to increase total revenue.
Correct Answer:
Verified
Correct Answer:
Verified
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