Consider the market for Barilla pasta sauce. Barilla is an Italian food company
ID: 1199281 • Letter: C
Question
Consider the market for Barilla pasta sauce. Barilla is an Italian food company best known for its spaghetti, penne, and ziti. The 135-year-old family-owned company hopes to boost its brand recognition in the U.S. by convincing more Americans to eat pasta. To do so, Barilla is lowering prices of its pastas in the U.S. Barilla’s strategy is to increase its revenue from pasta sauce on the resulting uptick in sales of its pasta. In this manner, Barilla’s pasta and pasta sauce are complements in consumption. In the market for Barilla’s pasta sauce, the market price _____ and market quantity _____.
A. increases...increases
B. increases...decreases
C. decreases...increases
D. decreases...decreases
Explanation / Answer
C. decreases...increases