Question

If the price of Pepsi decreases relative to the price of Coke and $7$-up, the demand for __________.

• A. Coke will decrease
• B. $7$-up will decrease
• C. Coke and $7$-Up will increase
• D. Coke and $7$-up will decrease

Answer 1

Answer: (D)

Coke and $7$-up will decrease

If the price of Pepsi decreases relative to the price of Coke and 7-up, the demand for Coke and 7-up will increase.Law of demand states that when price increases, the demand for the commodity falls and when price decreases, the demand for the commodity rises.