If the cross price elasticity of demand for Pepsi with respect to the price of Coca Cola is -0.64, then(please choose all the answers that are correct) Pepsi is a substitute for Coca Cola. Pepsi is a complement for Coca Cola Pepsi is more preferred than Coca Cola. a decrease in the price of Coca Cola will cause demand for Pepsi Cola to increase. Pepsi is less preferred than Coke an increase of 10% in the price of Coca Cola will cause demand for Pepsi Cola decrease by 6.4%.

Inelastic means that when the price goes up, consumers’ buying habits will remain the same, and when…

Answered: If the cross price elasticity of demand…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the cross price elasticity of demand for Pepsi with respect to the price of Coca Cola is -0.64, then

(please choose all the answers that are correct)

		Pepsi is a substitute for Coca Cola.
		Pepsi is a complement for Coca Cola
		Pepsi is more preferred than Coca Cola.
		a decrease in the price of Coca Cola will cause demand for Pepsi Cola to increase.
		Pepsi is less preferred than Coke
		an increase of 10% in the price of Coca Cola will cause demand for Pepsi Cola decrease by 6.4%.

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