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2. Imagine that you run a small bakery. In March the price of a cupcake was $2, and you sold 50 per day. In April you increased the price of cupcakes to $3 and you sold 40 per day. 1. Did your revenue increase or decrease? 2. What was the price elasticity of demand to Cupcakes when price increased from $2 to $3. 3. Do you think demand was elastic or inelastic prior to the change in prices

2. Imagine that you run a small bakery. In March the price of a cupcake was $2, and you sold 50 per day. In April you increased the price of cupcakes to $3 and you sold 40 per day. 1. Did your revenue increase or decrease? 2. What was the price elasticity of demand to Cupcakes when price increased from $2 to $3. 3. Do you think demand was elastic or inelastic prior to the change in prices

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...
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2. Imagine that you run a small bakery. In March the price of a cupcake was $2, and you sold 50 per day. In April you increased the price of cupcakes to $3 and you sold 40 per day.

1. Did your revenue increase or decrease?

2. What was the price elasticity of demand to Cupcakes when price increased from $2 to $3.

3. Do you think demand was elastic or inelastic prior to the change in prices

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