At a Price of $8 Per Dozen, Chuy Sells 40

question 158

Multiple Choice

At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week.When he raised his price to $12 per dozen, he still sold 40 dozen per week.Based on this information, the demand for his tamales is

• A)perfectly elastic.
• B)inelastic.
• C)perfectly inelastic.
• D)unit elastic.

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Definitions:

Say's Law

An economic theory suggesting that the production of goods creates its own demand, essentially asserting that "supply creates its own demand."

Real Balances Effect

The impact on consumer purchasing power resulting from a change in the price level, affecting real income and consumption.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, often used as a measure of inflation.

Consumption

The act of using goods and services for personal needs or desires, a basic economic activity measured to assess the health and growth of an economy.