You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",
A)Sales of "Blue Cow" would increase,without any changes in sales for "600 minute energy."
B)Sales of both "Blue Cow" and "600 minute energy." would increase
C)Sales of "Blue Cow" would increase,but the sales of "600 minute energy" would be cannibalized
D)Neither "Blue Cow" nor "600 minute energy" would see an increase in sales.

Question

You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",​
A)​Sales of "Blue Cow" would increase,without any changes in sales for "600 minute energy."
B)Sales of both "Blue Cow" and "600 minute energy." would increase
C)Sales of "Blue Cow" would increase,but the sales of "600 minute energy" would be cannibalized
D)​Neither "Blue Cow" nor "600 minute energy" would see an increase in sales.

Quizplus · Accepted Answer

Reducing the price of "Blue Cow" would likely increase its sales due to the lower price attracting more customers. However, since "Blue Cow" and "600 minute energy" are owned by the same company and serve similar markets, the increase in "Blue Cow" sales could come at the expense of "600 minute energy" sales, a phenomenon known as cannibalization.

You Own Two Different Energy Drink Brands: "Blue Cow" and "600