With the aid of a diagram, explain to Ann-Marie the impact of the increase in the price of flour on her ability to bake cakes for her customers. B. The price of the cheesecake increased from $2500 to $3100 while the quantity demanded moved from 250 to 200; calculate the price elasticity of demand. Based on your answer,how will the price increase affect her total revenue?
With the aid of a diagram, explain to Ann-Marie the impact of the increase in the price of flour on her ability to bake cakes for her customers. B. The price of the cheesecake increased from $2500 to $3100 while the quantity demanded moved from 250 to 200; calculate the price elasticity of demand. Based on your answer,how will the price increase affect her total revenue?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Ann-Marie bakes cheesecake for sale. She realises that the
result, she increases the price of her cheesecake, but her customers bought less.
A. With the aid of a diagram, explain to Ann-Marie the impact of the increase in the price of flour on her ability to bake cakes for her customers.
B. The price of the cheesecake increased from $2500 to $3100 while the quantity demanded moved from 250 to 200; calculate the
C. Explain TWO (2) other factors that can affect her business the way the increase in theprice of flour just did.
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