The Local Pizza Restaurant Makes Such Great Bread Sticks That

question 16

Multiple Choice

The local pizza restaurant makes such great bread sticks that consumers do not respond much to a change in the price.If the owner is only interested in increasing revenue, he should:

• A)lower the price of the bread sticks
• B)raise the price of the bread sticks
• C)leave the price of the bread sticks alone
• D)reduce costs

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing better performance evaluation.

Other Expenses

Costs not directly related to the core operations of a business, such as interest payments or losses from selling assets.

Food And Supplies

Items necessary for the preparation and service of food in industries such as catering or restaurants.

Net Operating Income

It is the total profit of a company after operating expenses are subtracted from total revenue but before interest and taxes are deducted.