Determine the preferences of the vendors customers

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Reference no: EM133269961

Assignment:

A large Coca-Cola vendor recently hired some economic analysts to assess the effect of a price increase in its 16-ounce bottles from $1.00 to$2.00. The analysts determined that, on average, the vendor's customers spend about $15.00 on soda (Coke and all other brands) each week, and the average price for other 16-ounce soda bottles is $1.00. The analysts also utilized some focus groups to determine the preferences of the vendor's customers. They used this analysis to build the following graph:

Suppose X0=9 and X1=7. Should the vendor expect to sell 7, more than 7, or less than 7 bottles of Coke after raising the price to $2.00 if Coke is a normal good?

Reference no: EM133269961

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