The city of Huntsville is known for its wide variety of ice cream shops.What will happen if Nicola's Ice Cream Castle raises the price of its shakes?
A) Demand will decrease by a greater proportion than the price.
B) Demand will increase by a greater proportion than the price.
C) The quantity demanded will decrease by a greater proportion than the price.
D) The quantity demanded will increase by a greater proportion than the price.
E) Demand will not change.

Question

Quizplus · Accepted Answer

Huntsville is known for its wide variety of ice cream shops, so consumers have many options to choose from. If Nicola's Ice Cream Castle raises the price of its shakes, consumers are likely to choose to purchase from other ice cream shops instead. As a result, the quantity demanded of Nicola's shakes will decrease by a greater proportion than the price increase. Therefore, choice C is the best answer.

The City of Huntsville Is Known for Its Wide Variety