A 10 Percent Increase in the Price of Root Beer

question 141

Multiple Choice

A 10 percent increase in the price of root beer causes a 5 percent increase in the quantity demanded of orange soda.This means that _____

• A)root beer and orange soda are substitutes.
• B)root beer and orange soda are complements.
• C)the cross-price elasticity of demand is 1.
• D)the cross-price elasticity of demand is equal to 2.
• E)the cross-price elasticity of demand is equal to −2.

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Sales Manager

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