A 15 percent increase in the price of cookies results in a 9 percent decrease in the quantity of cookies sold.The revenue received by cookie suppliers will ________ because the price elasticity of demand for cookies is ________.
A) decrease; inelastic
B) increase; elastic
C) decrease; elastic
D) not change; unitary elastic
E) increase; inelastic

Question

Quizplus · Accepted Answer

The revenue received by cookie suppliers will increase because the price elasticity of demand for cookies is inelastic. This means that the percentage change in quantity demanded is less than the percentage change in price, leading to an increase in total revenue despite the decrease in quantity sold.

A 15 Percent Increase in the Price of Cookies Results