Tracey Sells 100 Gourmet Cupcakes Per Day at $2 Each

Multiple Choice

Tracey sells 100 gourmet cupcakes per day at $2 each. She is considering raising her price to $2.50 per cupcake in order to increase her total revenue. If the price elasticity of demand for Tracey's cupcakes is 2, would she increase her total revenue?

A) Yes; total revenue would rise, since she would sell even more cupcakes due to the high elasticity.
B) Yes; total revenue would rise despite selling fewer cupcakes per day.
C) No; total revenue would fall because she would sell far fewer cupcakes.
D) No; total revenue would fall despite selling more cupcakes due to the high elasticity.