Suppose the Daily Demand for Coke and Pepsi in a Small

question 32

Multiple Choice

Suppose the daily demand for Coke and Pepsi in a small city are given by Q_C = 90 - 100P_C + 400(P_P - P_C) and Q_P = 90 - 100P_P + 400(P_C - P_P) ,where Q_C and Q_P are the number of cans Coke and Pepsi sell,respectively,in thousands per day.P_C and P_P are the prices of a can of Coke and Pepsi,respectively,measured in dollars.The marginal cost is $0.45 per can for both Coke and Pepsi.What is Coke's best response function?

• A) Q_C = 200P_P - 67.5
• B) Q_C = (90 + 400P_P) - 500P_C
• C) P_C = 0.315 + 0.4P_P
• D) P_C = (0.18 + 0.8P_P) - 0.002Q_C

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