If a Pizza Hut restaurant near campus reduces its pizza prices by 15 percent, and as a result, its total revenue from pizza sales increases, this indicates that the price elasticity of demand was
A) elastic.
B) of unitary elasticity.
C) inelastic.
D) equal to 0.15.

Question

Quizplus · Accepted Answer

When the price elasticity of demand is elastic, a decrease in price leads to an increase in total revenue, indicating that the percentage change in quantity demanded is greater than the percentage change in price.

If a Pizza Hut Restaurant near Campus Reduces Its Pizza