A 10 Percent Increase in the Price of Soda Leads

question 1

Multiple Choice

A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It appears that:

• A) elasticity of demand for soda 0.5 and is inelastic.
• B) elasticity of demand for iced tea is 2 and is elastic.
• C) cross-price elasticity of demand for soda is -0.5.
• D) cross-price elasticity of demand for iced tea is -2.

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Definitions:

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Continuous Process Improvement

The ongoing effort to improve products, services, or processes through incremental and breakthrough improvements.

Japanese Management

A unique style of corporate management originating in Japan, emphasizing consensus, long-term employment, slow decision-making processes, and strong loyalty to the company.

Narrow Job Classifications

The practice of defining job roles and responsibilities in a highly specific and restricted manner.