University of Richmond Professor Erik Craft analyzed the states' pricing of vanity plates. He found that in California, where vanity plates cost $28.75, the elasticity of demand was 0.52. In Massachusetts, where vanity plates cost $50, the elasticity of demand was 3.52.
What recommendation would you have for each state to maximize revenue?
Which state's policy is least popular politically?
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Increase price in California,while decrease price in Massachusetts.