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Your Local Grocery Store Offers a Coupon That Reduces the Price

Question 28

Multiple Choice

Your local grocery store offers a coupon that reduces the price of milk during the coming week. The regular retail price of milk in the store is $3.00 per gallon, and the coupon price is $2.00 per gallon for the next week. If the store maximizes profits and the price elasticity of demand for milk is -2 for coupon users, what is the price elasticity of demand for non-users?


A) -0.67
B) -1.0
C) -1.5
D) We do not have enough information to answer the question.

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