Part 1 - 10 Marks Demand for Pepsi Consider the price-setting power of firms in a unique time in history, post-pandemic amidst an outbreak of high inflation (2022 to mid-2023), followed by a steady period of relatively moderate inflation in recent months. We shall focus on the beverage giant, PepsiCo. To give you some relevant knowledge and guidance for this task, read the following freely available articles: https://www.fastcompany.com/90902098/how-long-can-companies-raise-prices-inflation-pepsi https://www.crikey.com.au/2024/02/12/mcdonalds-pepsi-price-gouging-inflation-cost-of-living/ Consider two scenarios. Scenario 1: Assume the firm increased price of their Pepsi fizzy drink by 25% over 2022-2023. Scenario 2: Assume the firm increased price of their Pepsi fizzy drink by 5% in first quarter of 2024. For each scenario, do the following: ▪ Draw a single straight-line demand curve and explain the relevant details on the price elasticity of demand (PED). ■ Show the workings of your calculation of PED. ▪Describe and quantify what would happen to revenue in this case. ■ In your answer, use hypothetical incremental values (rough guesses from your imagination) for the prices on the y-axis and quantities on the x-axis. 0,000 0,000 0,000 0,000 0 North America Europe Latin America Asia Pacific Middle East & Africa Data source: statista