Question : Danny "Dimes" Donahue a neighborhood's 9-year-old entrepreneur. His most recent : 6797
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 $2.5 each, he sells 100. At a price of $2 each, he sells 300. a. What is the elasticity of demand? -10 b. Is demand elastic or inelastic over this price range? Elastic c. If demand had the same elasticity for a price decline from $2 to $1.5 as it does for the decline from $2.5 to $2, would cutting the price from $2 to $1.5 increase or decrease Danny's total revenue? Increase.