When elle's espresso bar raised its price by 10 percent, the quantity of coffee that elle sold decreased by 40 percent. when elle and all her competitors cut their prices by 10 percent, the quantity of coffee sold by elle increased by only 4 percent. explain the difference between the responses to elle's price hike and the price cut. why did the price increase bring a large response in the quantity sold while the price cut had only a small effect?
a. the change in the quantity demanded is always larger with a price hike than with a price cut.
b. with a price hike the demand for elle's coffee is inelastic, but with a price cut the demand for elle's coffee is elastic.
c. elle's coffee has lots of dose substitutes while coffee has few substitutes, so the demand for elle's coffee is more inelastic than the market demand for coffee.
d. elle's coffee has lots of dose substitutes while coffee has few substitutes, so the demand for elle's coffee is more elastic than the market demand for coffee.