For multiple select questions (square boxes), there could be zero, 1, 2, or as many as all of the answers that are corr...

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For multiple select questions (square boxes), there could be zero, 1, 2, or as many as all of the answers that are corr...

For multiple select questions (square boxes), there could be zero, 1, 2, or as many as all of the answers that are correct and can be selected.

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

1. Pepsi is a complement for Coca Cola.

2. a decrease in the price of Coca Cola will cause demand for Pepsi Cola to decrease.

3. Pepsi is a substitute for Coca Cola.

4. Pepsi is more preferred than Coca Cola.

5. an increase of 10% in the price of Coca Cola will cause demand for Pepsi Cola increase by 0.64%.

business economics

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Answer 1

Answer #1

Since the cross price elasticity is greater than zero,coke and Pepsi are substitutes.

A decrease in price of coke will increase demand for coke and decrease demand for Pepsi.

Answer-2 and 3

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Answer 2

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