Concha y Toro,a Chilean wine,has reduced the price of one bottle from $10 to $8.It previously sold 420 bottles in the month prior to the price reduction,and it now sells 525 bottles per month.What is it experiencing?
A)consumer elasticity
B)inelastic demand
C)elastic demand
D)unitary elasticity

Question

Quizplus · Accepted Answer

Under unitary elasticity,the increase in demand exactly offsets the decrease in price.420 ? $10 and 525 ? $8 = $4,200.

Concha Y Toro,a Chilean Wine,has Reduced the Price of One