The Figure Above Shows the Demand Curve for Starbucks Latte

question 184

Multiple Choice

The figure above shows the demand curve for Starbucks latte.
-Using the figure above,suppose Starbucks charges $4.50 per cup for its latte.Which of the following is true?
i.At this price,the demand for Starbucks latte is elastic.
ii.If Starbucks lowers the price of its latte,its revenue will decrease.
iii.If Starbucks raises the price of its latte,the demand for it will become less elastic.

• A) Only iii
• B) Only i
• C) Only ii
• D) i and ii
• E) i and iii

Grasp the relationship between pricing strategies and profit objectives.

Understand the impact of cost (supply and demand costs) on pricing decisions.

Realize the practical applications of pricing strategies in real-world scenarios.

Understand the concept of competitive pricing strategies and their implications on market dynamics.