Question

A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It appears

that:
OAA 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It
appears that:
B. elasticity of demand for iced tea is 2 and is elastic.
C. cross-price elasticity of demand for soda is -0.5.
D. cross-price elasticity of demand for iced tea is -2.

Answer 1

D. cross-price elasticity of demand for iced tea is -2.

Step-by-step explanation: