Final answer:
To calculate the price elasticity of demand for pizzas using the midpoint method, details on the change in quantity demanded are required in addition to the price increase from 14 to 16. Without this information, the elasticity cannot be determined. The elasticity value indicates whether demand is inelastic or elastic.
Step-by-step explanation:
Using the midpoint method, the price elasticity of demand for pizzas when the price increases from 14 to 16 can be calculated. However, the information provided does not include the specific changes in the quantity demanded associated with the price changes. Usually, to calculate the elasticity, we would need to know how quantity demanded varies with price. With the midpoint method, the percentage change in quantity demanded and the percentage change in price is used to compute elasticity:
Price Elasticity of Demand (Ed) = (Percentage Change in Quantity Demanded) / (Percentage Change in Price)
Since we do not have the quantity demanded before and after the price change, we cannot calculate the elasticity here. The elasticity helps determine if a good is inelastic or elastic. If the elasticity is less than one, the demand is inelastic, meaning consumers are not very responsive to price changes. Conversely, an elasticity greater than one indicates elastic demand, where consumers are sensitive to price changes.