If cola and iced tea are good substitutes for consumers, then it is likely that: their price elasticities of demand are less than one. their cross price elasticities are greater than zero. their price elasticities of supply are less than one. their income elasticities are less than zero.

Question

If cola and iced tea are good substitutes for consumers, then it is likely that: their price elasticities of demand are less than one. their cross price elasticities are greater than zero. their price elasticities of supply are less than one. their income elasticities are less than zero.

Answer 1

If cola and iced tea are good substitutes for consumers, then it is likely that:**Their cross price elasticities are greater than zero.**Cross price elasticity of demand measures the responsiveness of the quantity demanded for one good when the price of another good changes. For substitute goods, an increase in the price of one good (e.g., cola) will lead to an increase in the demand for the other good (e.g., iced tea), resulting in a positive cross price elasticity.

Problemas

If cola and iced tea are good substitutes for consumers, then it is likely that: their price elasticities of demand are less than one. their cross price elasticities are greater than zero. their price elasticities of supply are less than one. their income elasticities are less than zero.

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