The Cross Price Elasticity of Demand for Coke with Respect

question 137

Multiple Choice

The cross price elasticity of demand for Coke with respect to the price of Pepsi has been estimated to be 0.61.If the price of Pepsi falls by 10 percent in a period, how will that affect the demand for Coke in that period, all other things unchanged?

• A) The demand for Coke will increase but by less than 6.1 percent.
• B) The demand for Coke will increase by 6.1 percent.
• C) The demand for Coke will not change because many people prefer Coke over Pepsi.
• D) The demand for Coke will fall.

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Definitions:

Brain-Body Size Ratio

A comparative measure of brain size relative to body size, often used to make inferences about the intelligence or behavioral complexity of an organism.

Humans

The species Homo sapiens, characterized by their ability to use complex language, make tools, and form social structures.

Animal Species

Animal species refers to a group of organisms belonging to the animal kingdom that share common characteristics and genetics which differentiate them from other groups within the same kingdom.

Nervous System

A sophisticated system of neurons and synaptic connections that conveys neural signals throughout the body.