If the price of Coke rises by 5 percent and the sales of Pepsi go up by 10 percent, we can conclude that
A. Both goods are normal goods.
B. Both goods are substitute goods because the cross-price elasticity is +0.5.
C. Both goods are substitute goods because the cross-price elasticity is +2.
D. The sign on the cross-price elasticity will be negative.
Answer: C
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