Question

Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15 percent fewer sodas. The price elasticity of demand for sodas from the campus vending machines, therefore, is:_________.

a. infinite.
b. inelastic.
c. elastic.
d. unit elastic.

Answer 1

Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15 percent fewer sodas. The price elasticity of demand for sodas from the campus vending machines, therefore, is inelastic

Step-by-step explanation:

The price is said to be inelastic when a there is large amount of increase in price and a small change in quantity demanded