Assume the Price Elasticity of Demand for MC Pretzel Co

question 26

Multiple Choice

Assume the price elasticity of demand for MC Pretzel Co.pretzels is 0.8.If the company increases the price of each bag of pretzels,total revenue will

• A)Decrease because fewer bags will be sold.
• B)Increase because demand is elastic and revenue will rise.
• C)Increase because the percentage increase in price is greater than the percentage change in quantity demanded.

---

Definitions:

Pie Chart

A circular statistic graphic, which is divided into slices to illustrate numerical proportion. Each slice represents a category's contribution to the total.

Line Graph

A type of chart used to display information as a series of data points connected by straight line segments, often to show trends over time.

Cumulative Frequency

The sum of a class and all classes below it in a frequency distribution.

Frequency Polygon

A graphical representation of the distribution of a dataset that shows the frequency of data points within certain intervals.