Ask Question
BusinessBusiness
2 June, 02:50

Gus buys cupcakes every saturday morning. when he walks into the bakery, he always orders by saying, "give me $10 worth of cupcakes." what does this tell you about gus's elasticity of demand for cupcakes?

+2
Answers (1)
  1. 2 June, 03:07
    0
    Elasticity of demand measures the responsiveness of quantity demanded to a change in the price of the good.

    a. Perfectly elastic - The good is perfectly elastic when the consumer is ready to buy any quantity at a fixed price.

    b. Perfectly inelastic - The good is perfectly inelastic when the change in the price of the good has not effect on its demand, that is when quantity demanded is same at whatever price.

    So, because here Gus is ready to buy any units of cupcakes at a fixed price of $10, the demand for cupcakes should be perfectly elastic.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Gus buys cupcakes every saturday morning. when he walks into the bakery, he always orders by saying, "give me $10 worth of cupcakes." what ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Explain one way in which social media can be used to collect market research data
Answers (1)
Balance sheet and income statement data indicate the following: Bonds payable, 6% (issued 2000, due 2020) $1,200,000 Preferred 8% stock, $100 par (no change during the year) 200,000 Common stock, $50 par (no change during the year) 1,000,000 Income
Answers (1)
When institutions and policies provide secure property rights, a fair and balanced judicial system, monetary stability, and effective limits on the power of government, which of the following is most likely to be encouraged? (A) Rent-seeking.
Answers (1)
Payment status not available according to information that we have on file. What does this mean?
Answers (1)
The manager of a regional warehouse must decide on the number of loading docks to request for a new facility in order to minimize the sum of dock costs and driver-truck costs.
Answers (1)
New Questions in Business
A structure within which executives, managers, specialists, and workers are broken out is commonly known as what type of structure?
Answers (1)
What way of calculating ROI makes it easiest to compare investments?
Answers (1)
Select the correct answer. Which assumption is a factor in Ricardo's Theory of International Trade? A. trade flow is restricted across borders B. trade laws are different in different nations C. labor is an irrelevant factor of production D.
Answers (1)
Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment strategy would be better. What would most strengthen argument for direct investment?
Answers (1)
A company has a defined benefit pension plan for its employees. On December 31, year one, the accumulated benefit obligation is $45,900, the projected benefit obligation is $68,100, and the fair value of the plan assets is $62,000.
Answers (2)
Home » Business » Gus buys cupcakes every saturday morning. when he walks into the bakery, he always orders by saying, "give me $10 worth of cupcakes." what does this tell you about gus's elasticity of demand for cupcakes?
Sign Up Forgot Password?