Suppose the price of Vanilla Coke increases by 9% and quantity demanded falls by 13% overall but only by 4% for loyal Coca-Cola customers.This means that for the general public there are _____ for Vanilla Coke,but for loyal Coca-Cola customers,Vanilla Coke is more of a _____.This means that Coca-Cola will enjoy an increase in total revenue only from _____.
A)several substitutes;necessity;loyal Coca-Cola customers
B)few substitutes;luxury item;the general public
C)no substitutes;necessity;the general public
D)several substitutes;necessity;the general public

Question

Quizplus · Accepted Answer

The fact that the price increase led to a larger decrease in quantity demanded for the general public than for loyal Coca-Cola customers suggests that there are several substitutes for Vanilla Coke, but for loyal customers, it is more of a necessity. Therefore, Coca-Cola will enjoy an increase in total revenue only from loyal Coca-Cola customers who are willing to pay the higher price for a product they need.

Suppose the Price of Vanilla Coke Increases by 9% and Quantity