Question

Wonder Coffee is a chain of coffee serving outlets and specializes in selling different flavors of coffee. The increase in the price of sugar does not affect Wonder Coffee's coffee prices very much and sales continue at their usual level. Identify the type of demand in this scenario. a. Fluctuating demand O b. Joint demand O c. Inclastic demand O d. Elastic demand

Answer 1

c. Inelastic demand

Step-by-step explanation:

Inelastic demand means that the quantity ordered on a product is not affected by changes in price. The demand is relatively constant regardless of a change in price.

Coffee and sugar are complementary goods. Usually, price fluctuation in one of them should affect the demand of the other. In this case, changes in sugar prices have not affected the demand for coffee. If price changes do not affect demand, then the product has inelastic demand.