The cross price elasticity for Sprite for a change in the price of 7up is likely to be
A)Negative and more negative than -1
B)Negative but less negative than -1
C)Zero
D)Positive

Question

Quizplus · Accepted Answer

Cross price elasticity measures the responsiveness of the demand for one good to a change in the price of another good. Since Sprite and 7up are substitutes, an increase in the price of 7up would likely lead to an increase in the demand for Sprite, resulting in a positive cross price elasticity.

The Cross Price Elasticity for Sprite for a Change in the Price