Describe verbally the relationship between soft drinks and

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Suppose you are told that the price elasticity of demand for soft drinks is 2.0; the cross price elasticity of demand of soft drinks for iced tea is 1.5; the cross price elasticity of demand of soft drinks for popcorn is -2.0; and the income elasticity of demand for soft drinks is 1.2. Use this information to answer the following question.

Describe verbally the relationship between soft drinks and popcorn. In your statement describe how you know these two goods have this relationship.

Describe verbally the relationship between soft drinks and iced tea. In your statement describe how you know these two goods have this relationship.

Are soft drinks a normal or an inferior good given the above information? Explain your answer fully.

Reference no: EM13323932

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