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The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The souvenir sheets usually contain several high-value St. Vincent stamps depicting a common theme, such as the life of Princess Diana. The souvenir sheets are designed and printed for the postal service by Imperial Printing, a stamp agency service company in the United Kingdom. The souvenir sheets cost the postal service $.60 each. (The currency in St. Vincent is the East Caribbean dollar.) St. Vincent has been selling these souvenir sheets for $4.00 each and ordinarily sells about 52,000 units. To test the market, the postal service recently priced a new souvenir sheet at $5.00 and sales dropped to 40,000 units.Estimate the price-elasticity of demand.
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