Question 6 (1 point)

The following information relates to question 6 through 9.

Water: People are going from one store to another to buy bottled water.Supplies of bottled water are in short supply; everyone is concerned if water is going to be available. You currently sell water for $1.25 per bottle.Your competitor used to sell water for $1.25 per bottle, but once the virus hit, the competitor raised their price for water to $1.75 per bottle.You are considering increasing the price of your bottled water to $1.70.You assume quantity demanded will decrease from 200 bottles per week to 185 bottles per week.

How would you characterize the water being sold by yourself and by others in the industry?

Question 6 options:

A)

An inferior good.

B)

A complementary good.

C)

A substitute good.

D)

A perfectly competitive good.

Question 7 (2 points)

Given the current economic situation created by the pandemic, would you assume that bottled water is more elastic or inelastic? Briefly explain.

Question 7 options:

Question 8 (1 point)

Calculate the cross elasticity of demand. [round up to the 2^nd decimal place]

Question 8 options:

A)

-4.13.

B)

.38

C)

.24

Question 9 (1 point)

The income elasticity of water bottles is 0.6.Water bottles are what type of good?

Question 9 options:

A)

inferior good.

B)

Necessity good.

C)

Luxury good.