Question

At a price of $20, Daphne sells 35 hand-painted dog collars per week. When she raised her price to $25, she sold 28 per week. Based on this information, the demand for her dog collars is

A. unit elastic.
B. perfectly elastic.
C. elastic.
D. inelastic.

Answer 1

The demand for Daphne's dog collars is elastic.

Step-by-step explanation:

A change in price affects the demand for a product, and the relationship between price and quantity demanded is known as price elasticity of demand. In this case, when Daphne raised the price of her dog collars from $20 to $25, the quantity demanded decreased from 35 to 28 per week. Since the percentage change in quantity demanded is greater than the percentage change in price, the demand for her dog collars is elastic. This means that a change in price has a relatively large impact on the quantity demanded.