Suppose the price of cupcakes decreases by 5%, and the quantity of cupcakes demanded increases by 15%. Demand for cupcakes is:
A)price elastic.
B)price inelastic.
C)price unit-elastic.
D)perfectly price inelastic.

Question

Quizplus · Accepted Answer

The fact that the quantity demanded increased by a greater percentage than the price decreased indicates that the demand for cupcakes is elastic. This means that consumers are responsive to changes in price and will increase their purchases significantly when the price decreases.

Suppose the Price of Cupcakes Decreases by 5%, and the Quantity