Question

Franco's Pizzeria sells slices of pizza for $2.00. According to the market demand schedule and assuming ceteris paribus, what happens when Franco's raises the price to $2.50 a slice? (1 point)

* The quantity demanded per day stays the same.
* The quantity demanded falls from 100 slices a day to 50 a slice.
* The quantity demanded falls from 150 a day to 100 a day.
* The quantity demanded increases to 250 a day.

Answer 1

Assuming all other factors remain constant, when Franco's Pizzeria increases the price of pizza slices from $2.00 to $2.50, the quantity demanded would likely decrease due to the basic economic principle of demand, which suggests an inverse relationship between price and quantity demanded.

Step-by-step explanation:

When Franco's Pizzeria raises the price of a slice of pizza from $2.00 to $2.50, assuming ceteris paribus (all other factors being constant), the quantity demanded is likely to fall. According to basic principles of demand in economics, there is an inverse relationship between price and quantity demanded. Therefore, as price increases, quantity demanded usually decreases. From the available options, without the specific market demand schedule, we cannot deduce the exact change in quantity demanded. Typically, a demand equation such as Qd = 16-2P could be used to calculate the change, but this requires additional information not provided here.

For example purposes, if the original demand was at 100 slices a day and the pizzeria increased the price leading to the demand falling to 50 slices a day, this would illustrate a price elasticity of demand where consumers are responsive to price changes. If no specific numbers were given, we'd anticipate some reduction in the quantity demanded but could not specify the amount without further information.

Answer 2

Due to the increase in the price of the pizza, it is conclusive that the demand will decrease. Assume that the amount he will earn will stay the same and it is the product of the number of pizza and the price, the choice that would satisfy this is the third choice.