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When the price of doodads falls from $16 to $10 the quantity of doodads demanded rises...

When the price of doodads falls from $16 to $10 the quantity of doodads demanded rises from 150 to 160 units.

a) Compute and categorize the elasticity of demand of doodads.

b) Interpret the number you calculated in part (a) for the elasticity of demand for doodads.

c) If the government placed an excise tax on doodads, who would pay the majority of that tax: consumers or firms? Explain verbally (no graph required).

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