Elasticity measures the behavioral response of economic agents in a given situation. Which question is likely to be answered using elasticity?

a) if a business raises its prices, are they utilizing new technology?

b) does on-demand internet streaming media cause more people to stay home?

c) if a restaurant puts their pizza on sale, will the additional number of pizzas sold offset the discount on each item? will their sales revenues for pizza go up or down?

Question

Aria

Business

20 February, 03:51

Elasticity measures the behavioral response of economic agents in a given situation. Which question is likely to be answered using elasticity?

a) if a business raises its prices, are they utilizing new technology?

b) does on-demand internet streaming media cause more people to stay home?

c) if a restaurant puts their pizza on sale, will the additional number of pizzas sold offset the discount on each item? will their sales revenues for pizza go up or down?

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Answers (1)

Know the Answer?

Ruth Archer · Answer 1

The correct answer is letter "C": if a restaurant puts their pizza on sale, will the additional number of pizzas sold offset the discount on each item? Will their sales revenues for pizza go up or down?

Explanation:

Elasticity is a measure of a variable's reaction to a change in another variable. It can describe the extent to which the supply or demand for a good or service changes with the price of goods or consumer income. Necessities such as milk or gasoline usually have low elasticity. This is because it takes a minimum change in price or consumer income to change the amount demanded. Thus, the questions:

If a restaurant puts their pizza on sale, will the additional number of pizzas sold offset the discount on each item? Will their sales revenues for pizza go up or down?

Are exclusively related to the supply and demand for pizza and the consequences of selling more could bring.