There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20%.The price elasticity of demand for cupcakes is:
A) inelastic.
B) elastic.
C) semi-inelastic.
D) semi-elastic.
E) pro-elastic.

Question

Quizplus · Accepted Answer

A more than proportional decrease in quantity demanded indicates a relatively high price elasticity of demand. Thus, the demand for cupcakes is elastic.

There Was a More Than Proportional Decrease in Quantity Demanded