A firm sells organic cold-brew coffee. Economists estimate that for this product, the price elasticity of demand (PED) is -1.4, the income elasticity of demand (YED) is +1.6, and the cross-price elasticity of demand (XED) with respect to the price of organic tea is +0.5.
Which of the following statements is correct?
A 10%10\%10% reduction in the price of organic cold-brew coffee will lead to a 1414\\%14 decrease in the quantity demanded.
The product is a normal good, and organic tea is a complement.
The product has income-elastic demand, and organic tea is a substitute.
Demand is price inelastic, meaning that raising the price of organic cold-brew coffee will increase the firm's total revenue.
