The Substitution Effect from a Rise in the Price of Pizza

question 394

Multiple Choice

The substitution effect from a rise in the price of pizza

• A) leads to a movement along the fixed budget line, due to a change in relative prices.
• B) increases the quantity demanded of pizza.
• C) decreases the quantity demanded of pizza.
• D) Both answers A and B are correct.

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Definitions:

Product Knowledge System

A system designed to organize, store, and manage information about products, serving as a resource for improving customer service and sales strategies.

Upselling

The practice of encouraging customers to purchase a comparable higher-end product than the one in question, enhancing customer satisfaction and increasing sales.

Greater Value

The increased worth or utility a product, service, or action brings to its stakeholders, usually surpassing its cost or their initial expectations.

Call Center

A centralized office used for receiving or transmitting a large volume of inquiries by telephone, often for customer service.