"Last October, due to an early frost, the price of a pumpkin increased by 10 percent compared to the price in the previous Halloween seasons. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million." Based on this statement, the
A) demand for pumpkins is elastic.
B) demand for pumpkins is inelastic.
C) demand for pumpkins is unit elastic.
D) demand curve for pumpkins shifted rightward.

Question

Quizplus · Accepted Answer

The demand for pumpkins is elastic because the percentage decrease in quantity demanded (25%) is greater than the percentage increase in price (10%).

"Last October, Due to an Early Frost, the Price of a Pumpkin