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Substitutes for sweetened drinks can include water, unsweetened tea, unsweetened coffee, and other unsweetened beverages. The cross-price elasticity of demand for sweetened drinks can vary
Substitutes for sweetened drinks can include water, unsweetened tea, unsweetened coffee, and other unsweetened beverages. The cross-price elasticity of demand for sweetened drinks can vary depending on the substitute in question. It measures how the quantity demanded of a good responds to a change in the price of another good. Unfortunately, I don't have specific data to provide an estimate for the cross-price elasticity of demand for sweetened drinks. Water is generally considered a substitute for soda. This is because both are consumed to quench thirst, and an increase in the price of soda might lead some consumers to drink more water instead. Given that water is a substitute for soda, the cross-price elasticity should be positive. This is because when two goods are substitutes, an increase in the price of one leads to an increase in the demand for the other, and vice versa. Therefore, if the price of soda increases, the demand for water should increase, resulting in a positive cross-price elasticity. 123
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