Question
Assume that in 1990, economists estimated that the cross-price elasticity between the quantity demanded of juice and the price of soda pop was +0.84.Today, the
Assume that in 1990, economists estimated that the cross-price elasticity between the quantity demanded of juice and the price of soda pop was +0.84.Today, the dynamics in the beverage industry have changed and the new cross-price elasticity between juice and the price of soda pop is +0.25. This would imply that, compared to the old estimate of +0.84, an increase in the price of soda pop would now lead to what type of shift in the demand for juice?
a.A bigger shift, but still in the same direction.
b.A smaller shift, but still in the same direction.
c.A smaller shift and in the opposite direction.
d.A bigger shift and in the opposite direction.
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