Is demand elastic or inelastic over this price range

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Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $2.75 each, he sells 100. At a price of $2.25 each, he sells 300.

a. What is the elasticity of demand? .

b. Is demand elastic or inelastic over this price range? .

c. If demand had the same elasticity for a price decline from $2.25 to $1.75 as it does for the decline from $2.75 to $2.25, would cutting the price from $2.25 to $1.75 increase or decrease Danny’s total revenue?

Reference no: EM13998595

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