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Question
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
A) substitutes, with a cross price elasticity of 0.5.
B) complements, with a cross price elasticity of -0.5.
C) substitutes, with a cross price elasticity of -2.0.
D) complements, with a cross price elasticity of -2.0.
Answer
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