Dominic Sells Pizza Slices for $5 on the Santa Monica

question 235

Multiple Choice

Dominic sells pizza slices for $5 on the Santa Monica Pier. He currently sells 500 slices of pizza per day.This is a perfectly competitive business, and Dominic faces a perfectly price elastic demand curve. If he wants to try to increase daily revenues to $3,000, he should

• A) raise the price of his pizza to $6 per slice and continue to sell 500 slices per day.
• B) lower the price of his pizza to $4 per slice and try to sell 750 slices per day.
• C) keep the price at $5 per slice and produce 600 slices per day.
• D) do nothing since he can do nothing to increase revenue.

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Definitions:

Visual Presentation

The display of information or data through visual means, such as charts, graphs, images, or videos, to enhance understanding or retention.

Responsiveness

The quality of reacting quickly and positively to stimuli or changes.

Unconditioned Response

An automatic reaction to a stimulus that occurs naturally, without the need for learning.

Pupil

The opening in the center of the iris of the eye, through which light enters the eye.