Very interesting post on NPR Money.
Before you read : Basics of 4th grade maths.
Radius = Distance from centre of circle to the permitter (end of circle).
Now read this.
Math is very simple…since pizza comes in Circle, the size of pizza increases with increase in Radius. i.e. distance from the centre to the end. To increase the size from say 8 inch (small) or 12 inch (Medium) to 16 inch (large) the radius should be squared. That means, the size of 16 inch pizza is 4 time bigger than 8 inch and is 2 time as large as 12 inch pizza. When you compare price difference, between the different Size, its marginal. In fact, price depends upon lot of other criteria and least being the cost of production or size etc…and if you convert it into per sq. inch, price for large size comes out to be lot lower than what you would pay for small size.