Cary Increases the Price of Her Cakes from $8 to $10

question 48

Multiple Choice

Cary increases the price of her cakes from $8 to $10 per cake, but her cash receipts decrease by 2 percent. The price elasticity of demand (in the $8 to $10 range) is

• A) elastic.
• B) inelastic.
• C) 0.02.
• D) 0.25.