Question

Danny "Dimes" Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $2.75 each, he sells 250. At a price of $2.25 each, he sells 300. A. What is the elasticity of demand?
B. Is demand elastic or inelastic over this price range?
C. If demand had the same elasticity for a price decline from $2.25 to $1.75 as it does for the decline from $2.75 to $2.25, would cutting the price from $2.25 to $1.75 increase or decrease Danny's total revenue?

Answer 1

Answer: c

Explanation: