Coke and Pepsi are substitute soft drinks. Which of the following would cause the demand curve for Pepsi to shift to the left?
A) a new Pepsi ad campaign that increases the popularity of Pepsi
B) the price of Coke decreases
C) the price of Pepsi decreases
D) the cost of making Pepsi rises

Question

Quizplus · Accepted Answer

If the price of Coke decreases, consumers may switch to Coke as a cheaper alternative to Pepsi, causing the demand curve for Pepsi to shift to the left. A new Pepsi ad campaign or a decrease in the price of Pepsi would likely increase the demand for Pepsi, while a rise in the cost of making Pepsi would likely lead to an increase in the price of Pepsi and a decrease in quantity demanded, but not necessarily a shift in the demand curve.

Coke and Pepsi Are Substitute Soft Drinks