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.

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Definitions:

Globalization

The process of interaction and integration among people, companies, and governments worldwide, leading to increased interconnectedness and interdependence.

Operations Strategy

A long-term plan for the design and management of operations functions within an organization, aligning operations with overall business strategy.