As a result of the demand increasing only slightly compared to the reduction in price, the demand must be <u>inelastic</u>.
<h3>Why is the demand inelastic?</h3><h3 />
The demand is considered to be inelastic if the price elasticity is less than 1.
The price elasticity is:
= (%Change in quantity/% Change in price)
Solving gives:
= 15 / 200 ÷ 0.50 / 3.50
= -0.525
In conclusion, the demand for the shakes is inelastic.
Find out more on inelastic demand at brainly.com/question/1899986.
Answer:
money and credit markets,investments,financial management
Explanation:
Finance consists of three interrelated areas: (1) money and credit markets, which deals with the securities markets and financial institutions; (2) investments, which focuses on the decisions made by both individuals and institutional investors; and (3) financial management, which involves decisions made within the ...
Answer:
The correct answer is option A.
Explanation:
Liquidity preference theory was given by J.M Keynes. He states that money is demanded by people because it holds certain liquidity.
There are various motives involved for which people prefer liquidity. These motive are precautionary, transactionary and speculative motives respectively.
When the demand for money is more than supply, it means there is excessive demand. This excess demand will lead to increase in the interest level. At higher interest, the quantity of money demanded will fall.
