Suppose that Jarir bookstores have a special membership program that gives customers a 20 percent discount on most hardcover books. But on Harry Potter and the Deathly Hallows, the bookstore offered a 40 percent discount with the hope of selling a very large quantity. The bookstore must believe that the demand for this book is
A) perfectly inelastic.
B) elastic.
C) perfectly elastic.
D) inelastic.

Question

Quizplus · Accepted Answer

The bookstore's strategy of offering a larger discount on "Harry Potter and the Deathly Hallows" to sell a very large quantity suggests they believe the demand is elastic. Elastic demand means that the quantity demanded responds significantly to price changes, so a larger discount is expected to lead to a substantial increase in sales.

Suppose That Jarir Bookstores Have a Special Membership Program That