Critical Thinking About Elasticity at the Coffee Shop Review Eye on Elasticity at the Coffee Shop:What Do You Do When Starbucks Raises the Price of a Latte? in the eText of click on the icon (1) to open a copy. Now answer the following questions. You enjoy Starbucks latte . What would be your most likely first response to a rise in the price of a Starbucks latte if all other latte prices didn't change? A. Nothing B. Work an extra hour to be able to pay the higher price C. Find a similar latte at another coffee shop D. Switch to tea

## Step 1<br />This problem is about understanding the concept of elasticity of demand in economics. The elasticity of demand measures how much the quantity demanded of a good or service changes in response to a change in its price. <br /><br />## Step 2<br />In this case, Starbucks raises the price of a latte, but the prices of other lattes remain the same. This means that the price of a Starbucks latte has become relatively more expensive compared to other lattes.<br /><br />## Step 3<br />According to the law of demand, if the price of a good or service increases, the quantity demanded decreases, assuming all other factors remain constant. This is because consumers will look for cheaper alternatives or substitutes.<br /><br />## Step 4<br />Given the options, the most likely first response to the price increase would be to find a similar latte at another coffee shop. This is because it is a direct action that consumers can take to avoid paying the higher price.