Your younger sister needs $80 to buy a new longboard.She has opened a lemonade stand to make the money she needs.She currently is charging $1 per cup,but wants to adjust her price to earn the money faster.What is your advice to her
A)If the demand for lemonade is perfectly elastic, leave the price the same and be patient.
B)If the demand for lemonade is elastic, raise the price to increase total revenue.
C)If the demand for lemonade is elastic, lower the price to increase total revenue.
D)If the demand for lemonade is inelastic, lower the price to increase total revenue.

Question

Quizplus · Accepted Answer

If the demand for lemonade is elastic, that means a change in price will have a greater effect on the quantity demanded. Lowering the price may attract more customers and increase the total revenue earned from the lemonade stand. Therefore, your sister should consider lowering the price to sell more cups of lemonade and earn the $80 she needs faster.

Your Younger Sister Needs $80 to Buy a New Longboard