Scenario 19.1 Use the following to answer the questions.Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
-Refer to Scenario 19.1. If Concession Supply increased its price by 10 percent and experienced only a 2 percent decrease in the demand for hotdogs, the demand would be
A)inelastic.
B)common.
C)prestige.
D)elastic.
E)marginal.

Question

Quizplus · Accepted Answer

The demand is inelastic because the percentage decrease in demand (2%) is less than the percentage increase in price (10%).