At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week.When he raised his price to $12 per dozen, he still sold 40 dozen per week.Based on this information, the demand for his tamales is
A)perfectly elastic.
B)inelastic.
C)perfectly inelastic.
D)unit elastic.

Question

Quizplus · Accepted Answer

The fact that Chuy was able to raise the price of his tamales from $8 to $12 per dozen without impacting the quantity demanded (40 dozen per week) demonstrates that the demand for his tamales is perfectly inelastic. This means that even if the price changes, consumers will still buy the same amount because there are no close substitutes for Chuy's homemade tamales.

At a Price of $8 Per Dozen, Chuy Sells 40