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The Individual vs. In General

While we may use Coca Cola and Pepsi to demonstrate goods that are typically seen as substitutes (elastic), we can only assert this in the broad sense, or across a society of consumers. While the majority of consumers likely believe that these two products are perfect substitutes, there are a number of consumers who may feel just the opposite. For example, in Atlanta, Georgia (Coca Cola's Headquarters), many consumers simply will not buy/drink Pepsi because of their loyalty to Atlanta's own. Therefore, these consumers do not see Coca Cola as an elastic good with respect to the price of Pepsi; these consumers will not alter their behavior based on the price of Pepsi.

We find this situation in a number of goods that can typically be described as substitutes when talking about them in a general sense. This is where individual taste and preferences come in; many consumers are loyal to their favorite brands.

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