You own a small house-cleaning service. Normally you charge a price of $90 for medium-sized houses, and on average your quantity demanded is 160 per month. You recently had a sale, $75 instead of $90, and the quantity demanded increased to 200. Calculate the arc elasticity for your service. Based on this, and only this, which is most likely?
a) Arc elasticity: 1.5; Price decrease leads to an elastic demand.
b) Arc elasticity: 0.75; Price decrease leads to an inelastic demand.
c) Arc elasticity: 2.0; Price decrease leads to an elastic demand.
d) Arc elasticity: 0.5; Price decrease leads to an inelastic demand.