Multiple Choice
A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. What can we conclude from this information?
A) The elasticity of demand for iced tea is 2 and is elastic.
B) The cross-price elasticity of demand for iced tea is -2.
C) The cross-price elasticity of demand for soda is -0.5.
D) The elasticity of demand for soda is 0.5 and is inelastic.
Correct Answer:
Verified
Correct Answer:
Verified
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