1. **Problem Statement:** Given the price elasticity of demand (EOD) for various goods, we want to find the effect on quantity demanded if the price of Alcoholic drinks increases by 5%. Also, we need to suggest a price strategy for each product to increase revenue. 2. **Recall the formula for price elasticity of demand:** $$EOD = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}$$ 3. **Calculate the change in quantity demanded for Alcohol:** Given: - Price EOD for Alcohol = $-0.83$ - Price increase = $5\%$ Using the formula: $$\% \text{ change in quantity demanded} = EOD \times \% \text{ change in price} = -0.83 \times 5 = -4.15\%$$ This means quantity demanded will decrease by 4.15% when price increases by 5%. 4. **Interpretation:** Since the elasticity is negative (as expected), an increase in price leads to a decrease in quantity demanded. 5. **Price strategy to increase revenue:** - For goods with $|EOD| < 1$ (inelastic demand), increasing price increases total revenue. - For goods with $|EOD| > 1$ (elastic demand), decreasing price increases total revenue. From the table: - Fuel & Light: $EOD = -0.47$ (inelastic) → Increase price to increase revenue. - Food: $EOD = -0.52$ (inelastic) → Increase price to increase revenue. - Alcohol: $EOD = -0.83$ (inelastic) → Increase price to increase revenue. - Dairy Produce: $EOD = -0.05$ (highly inelastic) → Increase price to increase revenue. 6. **Summary:** - Quantity demanded for Alcohol decreases by 4.15% if price increases by 5%. - For all goods listed, since demand is inelastic, raising prices will increase total revenue.