Suppose that Victoria and her friends are running a fundraiser by selling donuts. They want to know what will happen to their revenue if they increase the price of each donut from $0.80 to $1. What concept do they need to apply to find out their expected revenue?
A) price elasticity of supply
B) price elasticity of demand
C) cross elasticity of demand
D) income elasticity of demand

Question

Quizplus · Accepted Answer

To find out their expected revenue when they increase the price of each donut, Victoria and her friends will need to apply the concept of price elasticity of demand. This will help them determine how responsive their customers are to changes in the price of their product and to estimate the potential impact on sales revenue.

Suppose That Victoria and Her Friends Are Running a Fundraiser