Let the Price Elasticity of Demand for a Soft Drink

question 42

Multiple Choice

Let the price elasticity of demand for a soft drink be - 2. In the year 2005, the per capita consumption of soft drinks was about 500 cans per person, and the average price was $1.00 per can. If we suppose that demand for the soft drink is linear, Q^d = a - bP, where a and b are constants, Q^d is quantity demanded and P is price, an estimate of the demand equation could be:

• A) Q^d = 100 - 2P
• B) Q^d = 1500 - 2P
• C) Q^d = 1500 - 1000P
• D) Q^d = 1000 - 1500P

---

Definitions:

Sales Promotion

Marketing activities designed to increase sales in the short term, often through discounts, coupons, or special offers.

Main Street

Typically refers to the main thoroughfare in a town or city, often a center for local businesses and commerce, symbolizing the economic and social heart of a community.

Retailer

A business that sells goods to the public in relatively small quantities for use or consumption rather than for resale.

Tracking Impact

The process of monitoring and evaluating the effects or outcomes of a specific action, campaign, or strategy over time.