Question: Point Price Quantity demanded A $2.00 400 B $2.50 375 C $3.00 350 D $3.50 325 E $4.00 300 a)The market price for a doughnut

Point Price Quantity demanded

A $2.00 400

B $2.50 375

C $3.00 350

D $3.50 325

E $4.00 300

a)The market price for a doughnut was $3.00. However, it is now $3.50. Use the midpoint to calculate the price elasticity of demand ( ) for doughnuts.

b)How sensitive is the quantity demanded for cupcakes to price changes? Please explain briefly.

c)For this question use the price elasticity of demand calculated in part (a). If the price of doughnuts increases by 20%, how much will the quantity demanded change by?

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