The cross price elasticity for Papa John's pizza for a change in the price of Pizza Hut pizza is likely to be
A)Negative and more negative than -1
B)Negative but less negative than -1
C)Zero
D)Positive

Question

Quizplus · Accepted Answer

The cross price elasticity of demand between two goods is positive if they are substitutes, meaning if the price of Pizza Hut pizza increases, the demand for Papa John's pizza is likely to increase as well, indicating they are substitute goods.

The Cross Price Elasticity for Papa John's Pizza for a Change