A mother of young children plans to serve hot cider and cookies at a children's party. However, when she gets to the grocery store, she finds that a jug of cider is much more expensive than a canister of hot chocolate mix. She decides to purchase the canister of hot chocolate mix, because the hot chocolate can serve as a(n) _______ and demand is _______.
A) substitute; elastic.
B) complement; elastic.
C) independent; elastic.
D) substitute; inelastic.

Question

Quizplus · Accepted Answer

The hot chocolate serves as a substitute for the cider because it can replace it as a hot beverage for the party. The demand is considered elastic because the mother's decision to switch products is sensitive to a change in price.

A Mother of Young Children Plans to Serve Hot Cider