A Local Krispy Kreme Doughnut Shop Reduced the Price of Its

question 188

Multiple Choice

A local Krispy Kreme 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) of unitary elasticity.
• D) indeterminate; more information is needed to determine the price elasticity of demand.

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