​Figure 53

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-If a 50 percent increase in the price of pizza results in a 25 percent decrease in the quantity demanded of pizza, then the price elasticity of demand for pizza:

A) is equal to 0.5 and demand for pizza is inelastic.
B) is equal to 0.5 and demand for pizza is elastic.
C) is equal to 2 and demand for pizza is elastic.
D) is equal to 2 and demand for pizza is inelastic.
E) cannot be determined from the information provided.