Use the following scenario to answer the following questions: Dairy Wishes,a local ice cream store,finds that it sells out of ice cream sandwiches at the current price of $1.It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore.
-The demand for ice cream sandwiches is
A) inelastic.
B) elastic.
C) perfectly inelastic.
D) perfectly elastic.
E) unitary elastic.

Question

Quizplus · Accepted Answer

The demand is perfectly elastic because a small increase in price leads to the quantity demanded dropping to zero.

Use the Following Scenario to Answer the Following Questions: Dairy