Diet Coke Is a Close Substitute for Diet Pepsi

Multiple Choice

Diet Coke is a close substitute for Diet Pepsi. When Coca-Cola introduced Diet Coke in 1982, the price elasticity of demand for Diet Pepsi ________ and PepsiCo's ability to raise revenues through price increases ________.

A) increased; was reduced
B) increased; increased
C) decreased; was reduced
D) had no effect; was reduced