A local doughnut shop reduced the price of its doughnuts from $4 per dozen to $3.50 per dozen, and as a result, the daily sales increased from 300 to 400 dozen. This indicates that the price elasticity of demand for the doughnuts was:
A) elastic.
B) inelastic.
C) unitary elastic.
D) indeterminate; more information is needed to determine the price elasticity of demand.
Correct Answer:
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