Janet Gordon and Phil Hopkins graduated several years ago with M.S. degrees in accounting and set up a full-service accounting firm. Janet and Phil have many small business clients and have noticed some pricing trends while compiling annual financial statements.

The following data are for five of the pizza parlors which are Janet and Phil’s clients.

Required:
1. Is the demand for pizza relatively more elastic or inelastic?
2. What type of market structure characterizes the pizza industry? How do you suppose that Mamma Mia’s can charge so much more per pizza than Fast Freddy’s does?LO1

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Quantity. Sold Average Price Mamma Mia's 18,000 $10.00 Happy Time Pizza 21,000 7.90 Keg and Pie Pizza 22,000 8.00 Fast Freddy's Pizza 30,000 7.00 Pizza-pizza 24,000 7.50