If Sam the Pizzaiolo lowers the price of their pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Sam's pizzas in this range is:

Question

If Sam the Pizzaiolo lowers the price of their pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Sam's pizzas in this range is:
A. unit elastic
B. inelastic
C. elastic
D. inferior

GPT 3.5 · Answer

C. elastic

This is because the percentage change in quantity demanded (50%) is greater than the percentage change in price (16.67%), indicating that the demand for Sam's pizzas is elastic in this price range.