If the Cross Elasticity of Demand Between Coke and Pepsi

question 260

Multiple Choice

If the cross elasticity of demand between Coke and Pepsi is 2.02,then Coke and Pepsi are

• A) complements.
• B) substitutes.
• C) normal goods.
• D) inferior goods.
• E) Both answers B and C are correct.

---

Definitions:

Dividend Yield

A ratio indicating the annual dividends a company distributes in relation to its share price.

Capital Gain

The profit earned from the sale of an asset or investment when it sells for more than its purchase price.

Geometric Average Return

A method of calculating the average rate of return on an investment over time that accounts for compounding.

Returns

The profit or loss derived from investing or saving, often expressed as a percentage of the initial investment.