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Hungry Howie’s, Pizza Company

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February 20, 2013

Gokhan Karahan, PH.D
Delta State University
College of Business

Dear Dr. Karahan,
Hungry Howie’s, Pizza Company has decided to raise the price of their large pizza by 3%. The pizza company should consider: 1.Advertising showing how their pizza are made with comparison to how other pizza company make their pizza. 2. Add a product that complements their pizza, for example, a mix fruit drink. Television commercials should show the high quality of their pizza and new mix fruit drink. Advertising should stress how important their pizza is to the consumers’ everyday living, for example, “Don’t cook to night, our pizzas are homemade and ready for you.” A strong complement (mix fruit drink) for the pizza will make price elasticity of demand for the pizza more inelastic. A. A new fashion trend dictates the wearing of kilts. The demand for kilts will increase and curve shift right. B. The price of apples increases. No change in demand for apples, the quantity demand will change but no shifting of the demand curve. C. The price of Pepsi, a substitute for Coke, increases. The demand for coke will increase, on the same demand curve. D. The price of dog food increases. No change in demand. There is a decrease in quantity demanded of dog food. E. The consumers start liking minivans all of a sudden. No change in demand. If the cost of manufacturing minivans decreases, then supply of minivans will increase. F. The price of food used to feed dogs increases. The demand for dogs will decrease. G. A fall in income forces prospective yacht owners to cut back on luxuries. Demand for yacht will decrease; demand curve will shift to the left. H. Growers of oranges unexpectedly receive extremely favorable weather. No change

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