What happens to revenues of gas station after price change

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In your town a car wash company charges $8 per car. The car wash company rents the space from a gas station, and pays $5 for each car to the gas station. The car wash company washes 300 cars per week on average. If the company increase the price to $9, it will serve 270 cars. Determine the price elasticity of demand when the price is $8? What is the change in revenue when prices change from $8 to $9? What happens to the revenues of the gas station after the price change? If the gas station owned the car wash company, would it set the price to $8 or $9 per car? Why?

Reference no: EM131425985

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