Final answer:
The demand for Momo's pizza is elastic, as the sales increase of 50 percent exceeds the 20 percent decrease in price, showing a strong consumer response to price changes.
Step-by-step explanation:
If Momo's pizza decreases its price by 20 percent and, as a result, their sales increase by 50 percent, then the demand for Momo's pizza is considered to be elastic. This is indicated by the fact that the percentage increase in the quantity demanded is greater than the percentage decrease in price. In economics, elasticity measures how the quantity demanded responds to a change in price. Elastic demand means that consumers are quite responsive to price changes: a relatively small change in price leads to a relatively large change in the quantity demanded.