Your younger sister needs $50 to buy a new bike. She has opened a lemonade stand to make the money she needs. Your mother is paying for all of the ingredients. She currently is charging 25 cents per cup, but she wants to adjust her price to earn the $50 faster. If you know that the demand for lemonade is elastic, what is your advice to her? a. leave the price at 25 cents and be patient. b. Raise the price to increase total revenue c. Lower the price to increase total revenue. d. There isn't enough information given to answer this question.
Your younger sister needs $50 to buy a new bike. She has opened a lemonade stand to make the money she needs. Your mother is paying for all of the ingredients. She currently is charging 25 cents per cup, but she wants to adjust her price to earn the $50 faster. If you know that the demand for lemonade is elastic, what is your advice to her? a. leave the price at 25 cents and be patient. b. Raise the price to increase total revenue c. Lower the price to increase total revenue. d. There isn't enough information given to answer this question.
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter7: Demand And Supply
Section7.2: The Demand Curve And Elasticity Of Demand
Problem 6R
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Your younger sister needs $50 to buy a new bike. She has opened a lemonade stand to make the money she needs. Your mother is paying for all of the ingredients. She currently is charging 25 cents per cup, but she wants to adjust her price to earn the $50 faster. If you know that the demand for lemonade is elastic, what is your advice to her?
a. leave the price at 25 cents and be patient.
b. Raise the price to increase total revenue
c. Lower the price to increase total revenue.
d. There isn't enough information given to answer this question.
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