-Refer to Table 2.2,which presents hypothetical data on cross-price elasticity of demand estimates.Which goods are the best substitutes?
A) Coke and Pepsi
B) Hard Liquor and Beer
C) Beef and Chicken
D) Cheese and Butter

Question

-Refer to Table 2.2,which presents hypothetical data on cross-price elasticity of demand estimates.Which goods are the best substitutes?
A) Coke and Pepsi 
B) Hard Liquor and Beer 
C) Beef and Chicken 
D) Cheese and Butter

Quizplus · Accepted Answer

Coke and Pepsi are the best substitutes because they are likely to have the highest positive cross-price elasticity of demand, indicating that an increase in the price of one leads to an increase in the demand for the other.