Suppose that when the price of root beer rises 10%, the quantity of pizza demanded falls 20%. This would mean

Suppose that when the price of root beer rises 10%, the quantity of pizza demanded falls 20%. This would mean that pizza and root beer are complements:_________.

a. with a cross price elasticity of -2.0.
b. substitutes, with a cross price elasticity of -2.0.
c. substitutes, with a cross price elasticity of 0.5.
d. complements, with a cross price elasticity of -0.5.

Leave a Reply

Your email address will not be published. Required fields are marked *