Question No.1
Suppose XYZ is a coffee shop and located in one of the busy crowded university of Pakistan. This coffee shop is a popular spot for people to sit and discuss their studies and it is also famous for a quick cup of coffee on their way to class. The shop is open from 9:00 AM to 6:00 PM, Monday through Friday. The shop is currently selling 2,000 cups of coffee per day for Rs 200. The owner of the coffee shop is considering raising the price of a cup of coffee from Rs. 200 to Rs. 250. Coffee shop demand function is given below:
= 6000 − 20
A. Calculate price elasticity of demand when price is Rs. 250.
