If Powdered Soft Drinks Were Perfect Substitutes for Carbonated Soft

question 83

Multiple Choice

If powdered soft drinks were perfect substitutes for carbonated soft drinks, then the demand curve for carbonated soft drinks would

• A)be perfectly inelastic.
• B)have a price elasticity of 0.5.
• C)be perfectly elastic.
• D)have no price elasticity.
• E)have a unit-price elasticity.

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Definitions:

Inelastic Demand

A situation where the demand for a product does not change significantly in response to a change in its price.

Income Elasticity

A measure that shows how a change in income affects the demand for a good or service.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Plasma Screen

A type of display technology used in televisions and computer monitors, known for its bright, clear images and wide viewing angles.