If the cross-price elasticity of demand for Pepsi with respect to the price of Coca Cola is 0.64, then(Multiple choices) a decrease in the price of Coca Cola will cause demand for Pepsi Cola to decrease. Pepsi is a substitute for Coca Cola. an increase of 10% in the price of Coca Cola will cause demand for Pepsi Cola increase by 0.64%. Pepsi is more preferred than Coca Cola. Pepsi is a complement for Coca Cola.
If the cross-price elasticity of demand for Pepsi with respect to the price of Coca Cola is 0.64, then(Multiple choices) a decrease in the price of Coca Cola will cause demand for Pepsi Cola to decrease. Pepsi is a substitute for Coca Cola. an increase of 10% in the price of Coca Cola will cause demand for Pepsi Cola increase by 0.64%. Pepsi is more preferred than Coca Cola. Pepsi is a complement for Coca Cola.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If the cross-
a decrease in the price of Coca Cola will cause demand for Pepsi Cola to decrease. |
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Pepsi is a substitute for Coca Cola.
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an increase of 10% in the price of Coca Cola will cause demand for Pepsi Cola increase by 0.64%.
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Pepsi is more preferred than Coca Cola. |
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Pepsi is a complement for Coca Cola.
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