You run a dog walking service and this is your demand function:QD=40−1.5⋅P+0.8⋅M+0.5⋅PR
where M is income and it is $100,000 (which just enters as 100) and PR is the price your competitor charges and it is $40. You are currently charging a price of $50. Calculate the point elasticity of demand for your service at your current price, and then answer this question: Which of the following is correct?
a) Elasticity is greater than 1, indicating elastic demand.
b) Elasticity is equal to 1, indicating unitary elasticity.
c) Elasticity is less than 1, indicating inelastic demand.
d) Elasticity cannot be determined from the information provided.