By 2017, Pepsi and Coke were attempting to increase their profits in the bottled water market by introducing premium water brands.Pepsi and Coke introduced LIFEWTR and Smartwater, respectively, while competitors like Nestle and Danone produced their own versions of premium water.The premium water brands marketed to compete with LIFEWTR and Smartwater would be considered
A)complements to LIFEWTR and Smartwater.
B)substitutes for LIFEWTR and Smartwater.
C)inferior goods compared to LIFEWTR and Smartwater.
D)normal goods compared to LIFEWTR and Smartwater.

Question

Quizplus · Accepted Answer

Competitors producing their own versions of premium water indicate that these brands are substitutes for LIFEWTR and Smartwater, not complements. Premium water is generally considered a luxury item, so it is unlikely that competitors would produce inferior goods compared to LIFEWTR and Smartwater. Additionally, because premium water is a luxury item, it is considered a normal good, so neither LIFEWTR nor Smartwater would be considered superior to the other.

By 2017, Pepsi and Coke Were Attempting to Increase Their