Answer: An 8% reduction in sales volume.

The correct answer is **B** because the price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price. A PED of 0.8 implies that a 10% increase in price will lead to an 8% decrease in quantity demanded (volume). This relationship is derived from the formula: % change in quantity demanded = PED × % change in price. Since the unit cost remains constant, the change in revenue or cost of sales is not directly indicated by PED. Therefore, the most likely outcome is an 8% reduction in sales volume.

Author: LeetQuiz Editorial Team