Explain whether or not Ocean Spray cranberry juice, Sprite, Borden milk, Pepsi Lite, grape Kool-Aid, and Diet Dr. Pepper compete in the same market as Coca-Cola Classic
It all depends on the cross elasticities of demand. Most likely, Pepsi Lite, Diet Dr. Pepper, and Sprite are all
reasonable substitutes for Coca-Cola Classic, and compete in the carbonated soft drink market. Their cross
elasticities are probably high. Ocean Spray cranberry juice and grape Kool-Aid may also compete with
Coca-Cola Classic in the beverage market. Milk may be a different story. If its cross elasticity with Coke is
low, it does not belong in the same market. Do you consider them good substitutes?
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a. True b. False
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