If cola and iced tea are good substitutes for consumers, then it is likely that:
A) their cross price elasticities are greater than zero.
B) their price elasticities of demand are less than one.
C) their income elasticities are less than zero.
D) their price elasticities of supply are less than one .

Question

Quizplus · Accepted Answer

If cola and iced tea are good substitutes for consumers, their cross price elasticities are greater than zero. This means if the price of one increases, the demand for the other will increase as consumers switch to the cheaper alternative.

If Cola and Iced Tea Are Good Substitutes for Consumers