If a Pizza Hut Raises the Price of a Slice

question 315

Multiple Choice

If a Pizza Hut raises the price of a slice of pizza from $3.00 to $3.25,the quantity demanded decreases from 1,500 slices per week to 1,300 slices per week.The demand for slices of pizza is ________ and the total revenue received by this Pizza Hut ________.

• A) elastic; decreases
• B) inelastic; decreases
• C) elastic; increases
• D) inelastic; increases
• E) unit elastic; does not change

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Definitions:

Good Faith

Acting with honesty and sincerity without intention to defraud or seek an unfair advantage.

Delegation

The act of assigning responsibility or authority from one person to another, often seen in the context of tasks and duties.

Assignment

The transfer of rights, property, or obligations from one party to another, usually within the context of a contract.

Third-party Beneficiary

This is an individual or group that benefits from a contract although they are not one of the primary parties involved in the agreement.