Antony's Pizza uses the same dough, sauce, and cheese for pizza and calzones. When the price of pizza is low Antony produces more calzones. For Antony, the supply of pizza is compared to the supply at a pizza restaurant that does not serve calzones. Group of answer choices 1.lower 2.higher 3.more price elastic 4.less price elastic
Question
Antony's Pizza uses the same dough, sauce, and cheese for pizza and calzones. When the price of pizza is low Antony produces more calzones. For Antony, the supply of pizza is compared to the supply at a pizza restaurant that does not serve calzones. Group of answer choices
1.lower
2.higher
3.more price elastic
4.less price elastic
Solution
For Antony's Pizza, pizza and calzones are alternative uses of the same resources (dough, sauce, and cheese). When the price of pizza is low, Antony can switch to producing more calzones. This means that Antony's supply of pizza is more responsive to changes in price compared to a pizza restaurant that does not have the option to switch to producing calzones.
Therefore, for Antony, the supply of pizza is:
- more price elastic.
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