ECON 101 Study Guide - Quiz Guide: Cinnamon Roll, Demand Curve
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ECON 101 Full Course Notes
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For discussion in section on march 21st and 22nd. Amongst other things, ed sells cinnamon rolls at his caf s. He estimates demand for cinnamon rolls with the following functions: Qd = 95 10 p 10 pcoffee. D (c) suppose ed has precisely 100 cinnamon rolls to sell today. If so, what is the highest price that will allow him to sell all the cinnamon rolls. He should not sell them at the same price. He should sell them at a higher price at. If he were to sell cinnamon rolls for . 50 at both locations (and sell coffee at both locations for , resulting in 50 cinnamon rolls sold at each location), the demand curve at the uptown location is inelastic. Therefore, ed could raise his price at uptown and increase his revenue. Similarly, because the demand curve at the downtown location is elastic, he could lower his price downtown and increase his revenue.
