Ask Question
BusinessBusiness
18 August, 08:36

You are the sales manager for a pizza company and have been informed that the price elasticity of demand for your most popular pizza is greater than 1 (that is, the elasticity coefficient or Ed is greater than 1). To increase total revenues, you should

+5
Answers (1)
  1. 18 August, 09:03
    0
    decrease the sales price of that pizza.

    Explanation:

    When the price elasticity of demand (PED) is elastic, a small decrease in price will cause a larger increase in the quantity demanded.

    For example, the PED is 1.5 (elastic) and the price of pizza is $8 and you sell 100 pizzas.

    Prior to the price change total revenue = $8 x 100 = $800

    You decrease the price by 10% to $7.20 per pizza, and the quantity demanded increases by 15% ( = 1.5 x 10%) tot a total of 115 pizzas. Total revenue = $7.20 x 115 = $828
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “You are the sales manager for a pizza company and have been informed that the price elasticity of demand for your most popular pizza is ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What are the roles of actual returns and expected returns in investment planning?
Answers (1)
In the late 19th century and early 20th century, new U. S. territorial ambitions and acquisitions in the Western Hemisphere and the Pacific accompanied heightened public debates over America's role in the world. 1.
Answers (1)
According to the yerkes-dodson law, when is the most efficient time for carl to mow the lawn?
Answers (1)
All of the following are benefits of being a member of a professional organization, except A. providing a wide range of continuing education units. B. publishing newsletters and magazines dealing with current issues and trends in healthcare. C.
Answers (1)
A rich aunt has promised you $ 3 comma 000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 2 % larger than the last payment.
Answers (1)
New Questions in Business
QS 9-5 Allowance method for bad debts LO P2 Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,000 account of a customer, C. Green. On March 9, it receives a $1,500 payment from Green. 1.
Answers (1)
More and more companies are increasing their interactive marketing budgets. most of this investment will be made in:
Answers (1)
A website with no spelling mistakes, recent updates, and an author who isn't an expert on the subject is probably okay to use as a source.
Answers (1)
Secular inflation in the United States since 1960 has been most likely be the result of persistent leftward shifts of the aggregate demand curve. persistent rightward shifts of the long-run aggregate supply curve.
Answers (1)
Which of the following roles require publicly-traded companies to have an internal audit function? A) The New York Stock Exchange (NYSE) B) The Internal Revenue Service (IRS) C) The stockholdersD) The Board of Directors
Answers (1)
Home » Business » You are the sales manager for a pizza company and have been informed that the price elasticity of demand for your most popular pizza is greater than 1 (that is, the elasticity coefficient or Ed is greater than 1).
Sign Up Forgot Password?