The Cross Elasticity of Demand for Pizza with Respect to the Price

question 14

Multiple Choice

The cross elasticity of demand for pizza with respect to the price of a soda is

• A) positive because the goods are complements.
• B) negative because the goods are complements.
• C) positive because the goods are substitutes.
• D) negative because the goods are substitutes.

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Definitions:

Pure Rate

Pure rate, in finance, could refer to the actual interest rate without the influence of inflation or to the risk-free rate of return, which is the theoretical return of an investment with zero risk.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional shares.

PE Ratio

Price-to-Earnings Ratio; a valuation measure for a company comparing its current share price to its per-share earnings.

Yield %

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost or value.