A pizza shop observes that when it raises the price of the large pizza,total revenue from pizza decreases and when they lower the price of the large pizza,total revenue increases.This suggests that:
A)pizza lovers act irrationally.
B)the demand for large pizza must be elastic.
C)there are few good substitutes for large pizza.
D)the demand for large pizza must be inelastic.

Question

Quizplus · Accepted Answer

Total revenues increase when price decreases and total revenues decrease when price increases when demand is elastic.

A Pizza Shop Observes That When It Raises the Price