A local doughnut shop reduced the price of its doughnuts from $4 per dozen to $3.50 per dozen, and as a result, the daily sales increased from 300 to 400 dozen. This indicates that the price elasticity of demand for the doughnuts was:
A. elastic.
B. inelastic.
C. unitary elastic.
D. indeterminate; more information is needed to determine the price elasticity of demand.
Answer: A
You might also like to view...
Suppose a firm doubles its employment of all inputs in the long run. If this action more than doubles the amount of output produced, then this firm is experiencing
a. increasing returns to scale. b. diminishing marginal returns. c. technological progress. d. positive marginal revenue.
The nominal rate of interest is the difference between the real rate and the expected rate of inflation
a. True b. False Indicate whether the statement is true or false
The income people receive for supplying such things as land, labor, or capital
a. standard of living b. privatize c. economic system d. self-interest e. factor payments
A patent is a government protection that gives
A. companies the right to produce any good they choose. B. monopolies the right to be sole producers due to economies of scale. C. consumers the right to sue when products are unsafe. D. inventors exclusive rights to their product for a time.