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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Definitions:

Outbound Logistics

The process involved in moving goods from a company to the end user, including warehousing, order fulfillment, and transportation.

Value-Chain Analysis

An analytical framework for identifying business activities that add value to the final product or service in order to gain competitive advantage.

SPA

Typically stands for Sales and Purchase Agreement, a legally binding contract outlining the terms of sale between a buyer and seller.

Operations

Encompasses all the activities involved in the production, selling, and distribution of a company's goods or services.