12.You run a small business and would like to predict what will happen to the quantity demanded for your product if you raise your price. While you do nt know the exact demand curve for your product,you do know that in the first year you charged a price of $45 and sold 1200 units and in the second year you charged a price of $30 and sold 1800 units. If you plan to raise your price by 10%what would be a reasonable estimate of what might happen to quantity demanded in percentage terms? To answer this question.you need to find the elasticity.You can estimate the slope of the demand curve in the following way: 45-30 You can now use the elasticity formula and calculate elasticity at each data point,as well as the average point.The elasticities are: P=45andQ=1200 P9-404-15. elasticity==1200 P=30 and Q=1800 elasticity= Pg-40(30.-0.67 =0△P=1800 P=37.5andQ=1500 Pg40375=-1 1500 Given you are coming up with an estimate based on only two data points. it may be best to go with the average point.Ifelasticity is-1then a10% increase in price will cause quantity demanded to fall by 10% If you raise your price by 10%,will revenue increase or decrease? If elasticity is really-1 then revenue will fall if price is increased.If revenu will rise because the effect of the increase in price will outweigh the effect of the decrease in quantity.If elasticity is closer to-1.5(elastic)then revenue will fall when price is increased. 13.Suppose you are in charge of a toll bridge that costs essentially nothing to operate.The demand for bridge crossings Qis given by P=15-0. a. Draw the demand curve for bridge crossings12. You run a small business and would like to predict what will happen to the quantity demanded for your product if you raise your price. While you do not know the exact demand curve for your product, you do know that in the first year you charged a price of $45 and sold 1200 units and in the second year you charged a price of $30 and sold 1800 units. a. If you plan to raise your price by 10% what would be a reasonable estimate of what might happen to quantity demanded in percentage terms? To answer this question, you need to find the elasticity. You can estimate the slope of the demand curve in the following way: Q P = Q P = 1200 −1800 45 −30 = 600 −15 = −40 . You can now use the elasticity formula and calculate elasticity at each data point, as well as the average point. The elasticities are: P=45 and Q=1200 elasticity=  P Q Q P = −40(45) 1200 = −1.5. P=30 and Q=1800 elasticity==  P Q Q P = −40(30) 1800 = −0.67. P=37.5 and Q=1500 elasticity==  P Q Q P = −40(37.5) 1500 = −1. Given you are coming up with an estimate based on only two data points, it may be best to go with the average point. If elasticity is -1 then a 10% increase in price will cause quantity demanded to fall by 10%. b. If you raise your price by 10%, will revenue increase or decrease? If elasticity is really -1 then revenue will fall if price is increased. If elasticity is actually closer to -0.67 (inelastic) then revenue will rise because the effect of the increase in price will outweigh the effect of the decrease in quantity. If elasticity is closer to -1.5 (elastic) then revenue will fall when price is increased. 13. Suppose you are in charge of a toll bridge that costs essentially nothing to operate. The demand for bridge crossings Q is given by  P = 15 − 1 2 Q. a. Draw the demand curve for bridge crossings