Mindy is selling soda and lemonade at the local university's baseball game. She prices the soda at $4 a bottle and lemonade at $7 each. These are generally much higher prices than people would normally pay. What is likely to happen to demand?
A) Demand will plummet and Mindy will receive a significant loss.
B) Mindy will be able to provide a greater supply of beverages than normal.
C) Demand will be high because people tend to forget to bring their own beverages.
D) People will be willing to pay to enhance their baseball game experience.
E) Demand will not be high, but the high margins will provide a profit.

Question

Quizplus · Accepted Answer

People are willing to pay more for the enhanced experience of watching a baseball game. This is known as price elasticity of demand, where consumers are willing to pay more for an item in certain circumstances, such as at a sporting event where concessions are expected to be priced higher. Therefore, demand is likely to remain high despite the high prices Mindy is charging.

Mindy Is Selling Soda and Lemonade at the Local University's