What is the price elasticity of demand for pizza

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Reference no: EM131090920

If the price of a slice of pizza at a local pizzeria is $5.00 and the quantity demanded at this price is 50 slices. What is the price elasticity of demand for pizza if, when the price is increased to $5.50, the quantity demanded for pizza slices falls to 30 slices? An analyst working in this area reveals that generally pizza has a price elasticity of demand equal to 0.8. If this was true, what should have happened to the quantity demanded for pizza slices at this local pizzeria? (Compute this). Finally, provide an explanation for why the results from the analyst might be plausible even though not compatible with the actual outcome for the pizzeria.

Reference no: EM131090920

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