By 2017, Pepsi and Coke were attempting to increase their profits in the bottled water market by introducing premium water brands. Pepsi and Coke introduced LIFEWTR and Smartwater, respectively, while competitors like Nestle and Danone produced their own
versions of premium water. The premium water brands marketed to compete with LIFEWTR and Smartwater would be considered
A) complements to LIFEWTR and Smartwater.
B) substitutes for LIFEWTR and Smartwater.
C) inferior goods compared to LIFEWTR and Smartwater.
D) normal goods compared to LIFEWTR and Smartwater.
Answer: B
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a. have the same tax base as a consumption tax b. have the same tax base as an estate tax c. have the same tax base as a retail sales tax d. have the same tax bas as an income tax
John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
a. Harry has a comparative advantage in ironing. b. Harry has a comparative advantage in typing. c. Harry has an absolute advantage in typing. d. Harry has an absolute advantage in ironing. e. Neither can gain from specialization and exchange.