Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3.25/six-pack. You as an economic analyst, estimate that the cross-price elasticity between Pepsi and Coca-Cola is 0.6. If the retailer raises the price of Coca-Cola from $3.00 to $3.30/six-pack, how would sales of Pepsi be affected, ceteris paribus? Sales of Pepsi would not be affected at all Sales of Pepsi would rise by 30 six-packs Sales of Pepsi would rise by 60 six-packs а. b. с. d. Can't tell; insufficient information

Question
Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3.25/six-pack. You as an
economic analyst, estimate that the cross-price elasticity between Pepsi and Coca-Cola is 0.6. If the
retailer raises the price of Coca-Cola from $3.00 to $3.30/six-pack, how would sales of Pepsi be affected,
ceteris paribus?
Sales of Pepsi would not be affected at all
Sales of Pepsi would rise by 30 six-packs
Sales of Pepsi would rise by 60 six-packs
а.
b.
с.
d. Can't tell; insufficient information
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Transcribed Image Text

Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3.25/six-pack. You as an economic analyst, estimate that the cross-price elasticity between Pepsi and Coca-Cola is 0.6. If the retailer raises the price of Coca-Cola from $3.00 to $3.30/six-pack, how would sales of Pepsi be affected, ceteris paribus? Sales of Pepsi would not be affected at all Sales of Pepsi would rise by 30 six-packs Sales of Pepsi would rise by 60 six-packs а. b. с. d. Can't tell; insufficient information

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