The local bakery calculates the price elasticity of demand for its cinnamon rolls to be -1.25. This tells them that demand is and price is to the buyer.
A) inelastic; less important than the quantity
B) elastic; more important than the quantity
C) unitary elastic; on the same level as quantity
D) perfectly inelastic; everything
E) perfectly elastic; meaningless

Question

Quizplus · Accepted Answer

A price elasticity of demand of -1.25 indicates that demand is elastic, meaning that changes in price will have a significant impact on the quantity of cinnamon rolls demanded. This also means that price is more important to the buyer than the quantity of cinnamon rolls.

The Local Bakery Calculates the Price Elasticity of Demand for Its