Pizza Hut Lowers the Price of Its Pizza

question 65

Multiple Choice

Pizza Hut lowers the price of its pizza.The price elasticity of demand for Pizza Hut pizza equals 0.3.What happens to the Pizza Hut's total revenue?

• A) nothing
• B) It increases.
• C) It decreases.
• D) It becomes negative.
• E) It might change, but more information is needed to determine if it increases, decreases, or does not change.

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Definitions:

Uncertain Environment

An environment that lacks so much information that it is difficult to assign probabilities to the likely outcomes of alternatives.

Probabilities

The measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Nonprogrammed Decision

A decision made in response to situations that are unique, relatively unstructured, and undefined, often requiring creative problem-solving.

New Market

Refers to either a completely unexplored market sector or geographic area where a product, service, or business can expand.