When the Price of a Pizza Decreases from $12 to $10

question 489

Multiple Choice

When the price of a pizza decreases from $12 to $10, it is definitely the case that the

• A) income effect means people buy less pizza.
• B) substitution effect means people buy more pizza.
• C) quantity demanded of pizza will not change.
• D) None of the above answers is correct.

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Definitions:

Total Assets

The sum of all the assets owned by a company, including both current and non-current assets.

Return on Investment

A financial metric used to measure the profitability or efficiency of an investment, calculated by dividing net profit by the initial cost of the investment.

Required Rate

The minimum rate of return that an investment or project must offer to be considered viable or attractive.

Operating Assets

Assets used in the daily operations of a business to generate revenue, such as plant, equipment, inventory, and receivables.