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Raise in market price of soda in Chicago is discussed. Will it result in an increase in revenue and reduction in consumption? The PED suggests so. A similar policy was introduced in Mexico, and the soda there had a PED of 0,6, making it inelastic. Will the same happen in Chicago? Demand, elasticity and the PED are discussed in this article.

How exactly has this affected the elasticity? You should elaborate on price and its relation to demand and the PED. I agree that the raise in price would increase revenue and reduce consumption. However you contradict your previous point by stating that soda will become inelastic. I don't agree with you because soda is not a necessity and it is not healthy so if there is a raise in price and PED which will cause demand to decrease meaning it is elastic.

The price of coffee has been going up and will keep at it but this doesn't seem to affect demand as demand is still increasing. Now quality is not affected by price. These can be based on the fact that the product is addictive and not many substitutes will suffice. Some even think of it as a ritual every morning.

I agree that coffee is inelastic because it is typically contains caffeine which is an addictive drug. People are addicted to coffee and depend on it as part of their daily lives. They cannot function without it, or are at least unwilling to. Therefore, consumers will continue to purchase coffee despite rising prices. Coffee drinkers also enjoy the last of coffee and are not willing to switch to other caffeine filled drinks such as tea or soda because they are not close enough substitutes. In fact, coffee consumption has actually increased despite rising prices. Consumers will not change their tastes unless prices become drastically higher.

i agree with the point that the change in qunatity demanded is not very significant. This is due to the fact the coffee is a habit forming good and addictive to most coffee addicts. However it also depends on the proportion of income spent on the good. Coffee prices can range from being dirt cheap at hawker centres to expensive at cafes like Starbucks. Hence even if the consumer is not a coffee addict, and only a small proportion of income ( if it is 'insignificant' ) is spent on the good, then a change in price will not affect the spending behaviour ; demand is price inelasic