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If the price of Pepsi decreases relative to the price of Coke and 7-UP, the demand for :
- a)coke will decrease.
- b)7-Up will decrease.
- c)coke and 7-UP will increase.
- d)coke and 7-Up will decrease.
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
If the price of Pepsi decreases relative to the price of Coke and 7-UP...
Explanation:
When the price of Pepsi decreases relative to the price of Coke and 7-UP, it means that Pepsi has become relatively cheaper than Coke and 7-UP. This gives Pepsi a competitive advantage over Coke and 7-UP, leading to changes in the demand for these three products.
Decrease in the price of Pepsi leads to a decrease in the demand for Coke and 7-UP, which means that consumers will switch to Pepsi because it is cheaper. This leads to a decrease in the demand for Coke and 7-UP, and ultimately a decrease in their prices as well.
However, the decrease in the demand for Coke and 7-UP is not enough to offset the increase in the demand for Pepsi. As a result, the overall demand for carbonated soft drinks decreases, leading to a decrease in the demand for both Coke and 7-UP.
Therefore, the correct answer is option 'D' - the decrease in the price of Pepsi relative to the price of Coke and 7-UP leads to a decrease in the demand for both Coke and 7-UP.
When the price of Pepsi decreases relative to the price of Coke and 7-UP, it means that Pepsi has become relatively cheaper than Coke and 7-UP. This gives Pepsi a competitive advantage over Coke and 7-UP, leading to changes in the demand for these three products.
Decrease in the price of Pepsi leads to a decrease in the demand for Coke and 7-UP, which means that consumers will switch to Pepsi because it is cheaper. This leads to a decrease in the demand for Coke and 7-UP, and ultimately a decrease in their prices as well.
However, the decrease in the demand for Coke and 7-UP is not enough to offset the increase in the demand for Pepsi. As a result, the overall demand for carbonated soft drinks decreases, leading to a decrease in the demand for both Coke and 7-UP.
Therefore, the correct answer is option 'D' - the decrease in the price of Pepsi relative to the price of Coke and 7-UP leads to a decrease in the demand for both Coke and 7-UP.
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If the price of Pepsi decreases relative to the price of Coke and 7-UP...
Cake and 7up will become relatively expensive therefore their coustomer will move to pesi
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If the price of Pepsi decreases relative to the price of Coke and 7-UP, the demand for :a)coke will decrease.b)7-Up will decrease.c)coke and 7-UP will increase.d)coke and 7-Up will decrease.Correct answer is option 'D'. Can you explain this answer?
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