Table 7-8 -Refer to Table 7-8

question 220

Multiple Choice

Table 7-8
$\begin{array}{|l|c|}\hline & \begin{array}{c}\text { Estimated PriceElasticity } \\\text { of Demand }\end{array} \\\hline \text { Coca-Cola } & -3.0 \\\hline \text { All carbonated soft drinks } & -1.5 \\\hline \text { All soft drinks } & -0.8 \\\hline\end{array}$
-Refer to Table 7-8.Assume that an economist has estimated the price elasticity of demand values in the table above.Use the data in the table to select the correct statement.

• A) The demand for Coca-Cola is inelastic.
• B) The elasticity for "All soft drinks" is less than the elasticity for Coca-Cola because Coca-Cola is more of a luxury than a necessity; "All soft drinks" represent goods that are more necessity than luxury.
• C) The difference in elasticity values is explained by the fact that the more narrowly we define a market the more elastic the demand will be.
• D) There are fewer substitutes for "All carbonated soft drinks" than there are for "All soft drinks."

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