Suppose Aiyanna's Pizzeria Currently Faces a Linear Demand Curve and Is

question 346

Multiple Choice

Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5 percent per week for an indefinite period of time. We can expect that each successive week,

• A)demand will become more price elastic.
• B)price elasticity of demand will not change as price is lowered.
• C)demand will become less price elastic.
• D)the elasticity of supply will increase.

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