A Local Krispy Kreme Doughnut Shop Reduced Its Prices by 10

question 130

Multiple Choice

A local Krispy Kreme doughnut shop reduced its prices by 10 percent, and as a result, the quantity of doughnuts sold increased by 25 percent. Over this range, the absolute value of the price elasticity of demand was

• A) 0.4.
• B) 1.
• C) 2.
• D) 2.5

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Definitions:

Sale Prices

The actual prices at which goods or services are sold to customers, often after discounts are applied.

Prestige Pricing

A pricing strategy where prices are set higher than average to present a perception of exclusivity and high quality.

Impeccable Service

Exceptional and flawless service delivery that exceeds customer expectations and ensures total satisfaction.

Push Strategy

A marketing approach that involves taking the product directly to the customer via whatever means to ensure the customer is aware of your brand at the point of purchase.