**Scenario Overview:**Randall owns a small bakery. During his first few months in business, he charged $4 for each specialty cupcake, averaging sales of about 200 cupcakes each week. When Randall dropped the price one month to $3 each, he sold nearly 500 each week. These results are consistent with the economic concept of demand.**Question:**True or False- [True]- [False]---**Explanation:**This scenario illustrates the basic economic principle of demand, where a decrease in price typically leads to an increase in quantity demanded. In this case, when Randall reduced the price of his cupcakes from $4 to $3, his sales volume increased significantly from 200 to nearly 500 cupcakes per week. This change aligns with the law of demand, demonstrating a price elasticity scenario where consumers purchased more as the price decreased.

Answered: Randall owns a small bakery. During his…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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