Suppose that Nisshodo's Mochi shop raises the price of its mochi by 10% and its total...

Question

Question

Suppose that Nisshodo's Mochi shop raises the price of its mochi by 10% and its total revenue increased. This would mean that the demand for mochi is

inelastic.

perfectly elastic.

unitary elastic.

elastic.

Answer 1

Answer #1

The demand here for the product is inelastic. Inelastic demand is one where the change in price of the good doesn't effect it's qty demanded.

Or elasticity e<1 (less than 1)

Even after rising the price by 10% the revenue rose this means that consumers for product are driven towards it by need and not price.

Answer 2

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