PRACTICE WHAT YOU KNOW QUESTION: Punch Pizza is a small upscale chain in Minnesota that uses wood-fired ovens. In contrast, Pizza Hut is a large national chal chain would have a greater markup on each pizza? ANSWER: If you ask people in the Twin Cities about their favorite pizza, you will find a cultlike following for Punch Pizza. That loyalty tra inelastic demand. Punch Pizza claims to make the best Neapolitan pie. Fans of this style of pizza gravitate to Punch Pizza for the unique t flavor. In contrast, Pizza Hut competes in the middle of the pizza market and has crafted a taste that appeals to a broader set of customer customers can find many other places that serve a similar product, so these customers are much more price sensitive. The marginal cost c pizza at both places consists of the dough, the toppings, and wages for labor. At Pizza Hut, pizza assembly is streamlined for efficiency. Punch Pizza is more labor intensive, but its marginal cost is still relatively low. The prices