If a Pizza Hut Restaurant near Campus Reduces Its Pizza

question 90

Multiple Choice

If a Pizza Hut restaurant near campus reduces its pizza prices by 15 percent, and as a result, its total revenue from pizza sales increases, this indicates that the price elasticity of demand was

• A) elastic.
• B) of unitary elasticity.
• C) inelastic.
• D) equal to 0.15.

---

Definitions:

Bond Premium

The amount by which the market price of a bond exceeds its face value, typically resulting when market interest rates are lower than the bond's coupon rate.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debt obligations.

Operating Line

A revolving credit facility extended by a bank to a business to fund its day-to-day operations.

Notes Payable

Debt instruments or formal written agreements to pay a specified sum of money at a future date.