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

Question

Quizplus · Accepted Answer

The more than proportional decrease in quantity demanded for cupcakes indicates that consumers are sensitive to changes in price, making the demand for cupcakes elastic.

There Was a More Than Proportional Decrease in Quantity Demanded