Sofia is selling homemade cakes.The demand for homemade cakes is elastic.If Sofia reduces the price of her cakes,________.

Question

Quizplus · Accepted Answer

Since the demand for homemade cakes is elastic, a reduction in price will result in a more than proportionate increase in the quantity demanded. This means that even though the price has decreased, the increase in quantity sold will result in a larger total revenue for Sofia. Therefore, her revenue will increase.

Sofia Is Selling Homemade Cakes