Question

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome? a. Students would purchase fewer than 750 cups per day. b. Student would continue to purchase 750 cups per day. c. Students would purchase more than 750 cups per day. d. We do not have enough information to answer this question

Answer 1

Answer:

d. We do not have enough information to answer this question

Explanation:

We could say that maybe if the price lowers by pure law of supply and demand the consumers will consume more cups of coffe but for a more complete answer we need the elasticity of demand of that good (coffe), to be able to know in what quantity a change in the price would affect the demand and to know if the relation between the price and the units buyed are positive or negativa.