Freeze Ice Cream Shop sells its specialty shakes for $3.50 each. In the summer months, the shop typically sells 200 shakes a day. The shop's owner thinks if he reduces the price to $3 he will increase sales significantly. However, when he reduced the price, he only sold about 15 more shakes per day. This represents demand that is Blank______.

Question

Freeze Ice Cream Shop sells its specialty shakes for $3.50 each. In the summer months, the shop typically sells 200 shakes a day. The shop's owner thinks if he reduces the price to $3 he will increase sales significantly. However, when he reduced the price, he only sold about 15 more shakes per day. This represents demand that is Blank______.
Multiple choice question.

value-driven

even

inelastic

elastic

GPT-4o mini · Answer

The situation described indicates that the percentage change in quantity demanded (15 more shakes) is relatively small compared to the percentage change in price (from $3.50 to $3). This suggests that the demand for the shakes is not very responsive to price changes.

In this case, the demand is classified as inelastic.

So, the correct answer is: inelastic.