OF 3
In the town of Econville, a local bakery experiences an increase in the price of its specialty pastries due to the rising cost of unique ingredients. Despite the price nike, loyal customers continue to purchase the pastries, citing their unmatched quality and flavor. What does this scenario suggest about the demand elasticity for the bakery's specialty pastries?
Inelastic demand, as the quantity demanded remains relatively unchanged despite the price increase
Perfectly elastic demand, as any price increase would result in a complete loss of customers
Elastic demand, as the quantity demanded decreases with a price increase