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Q. In 1999, Domino's Pizza, a corporate sponsor of Washington Redskins (a football team) offered to reduce price of its medium-size pizza by $1 for every touchdown scored by Redskins during previous week. Until that year, Redskins weren't scoring many touchdowns. Much to surprise of Domino's, in week one of 1999, Redskins scored six touchdowns. As a result, price of Domino's pizzas fell from $8 a pie to $2 a pie following week. Quantity of pizzas demanded soared following week from 1 pie an hour to 100 pies an hour. What was price elasticity of demand for Domino's pizza?
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She is now considering raising her prices by 20 percent to offset the increase in her monthly rent.
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