If a 50 Percent Increase in the Price of Pizza

question 117

Multiple Choice

If a 50 percent increase in the price of pizza results in a 25 percent decrease in the quantity demanded of pizza,then the elasticity of demand for pizza:

• A)is equal to 0.5 and demand is inelastic.
• B)is equal to 0.5 and demand is elastic.
• C)is equal to 2 and is elastic.
• D)is equal to 2 and is inelastic.
• E)cannot be determined from the information provided.

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Definitions:

Electronic Deposit Requirement

A requirement for businesses to use electronic means to deposit certain types of taxes, including payroll taxes, directly to the IRS or state tax agencies.

Electronic Funds Transfer

An Electronic Funds Transfer (EFT) is the electronic movement of money from one bank account to another, either within a single financial institution or across multiple institutions, through computer-based systems.

Percentage Method

A way of calculating federal income tax withholding using percentage tables based on an employee's taxable income and filing status.

Federal Income Tax

A tax levied by the Internal Revenue Service on the annual earnings of individuals, corporations, trusts, and other legal entities.