The price elasticity of demand between milk and soda is likely to be:
A) negative, because the goods are complements.
B) positive, because the goods are complements.
C) negative, because the goods are substitutes.
D) positive, because the goods are substitutes.

Question

Quizplus · Accepted Answer

Milk and soda are substitutes, as they can be used to satisfy similar needs or wants (such as thirst or a desire for a cold beverage). When the price of one increases, consumers may switch to the other, resulting in a higher demand for the substitute good. Therefore, the price elasticity of demand between milk and soda is expected to be positive.

The Price Elasticity of Demand Between Milk and Soda Is