As part of her research-based, performative practice, Phrasekleia has decided to spend six months
working as a carpenter, making hope chests with elaborate interior carvings. Because of their intricacy
and her commitment to using only hand tools (no power tools), she expects each chest will require an
entire month of work (8 hours a day, 26 days per month). Her gallery already has a wait list of over 50
people who want to buy the works, and each collector can purchase only one.

a. She estimates that each chest will require $500 of materials (including tools), and she will rent a
workshop for $400/month. She wants to price the chests so that her total income (i.e., profit) will
be $15,295, equal to half the median annual income for women in New Lebanon, New York
(which was the spiritual home for the Shakers). How much should she charge?


b. Two years later, Phrasekleia has learned that the chests she had sold through the gallery were
being traded on the secondary market for far, far more than the original price. She decided to
produce another series of six chests. Her production costs and time have remained the same, but
this time she is pricing them so that she eams $30,590 in profit from each chest. The project has
received much attention, but the gallery's wait list for this series has only 20 people on it. How
price-elastic is the demand for these works?