Coca-Cola and the Price of Sugar In 1985, the Coca-Cola Company
was faced with soaring prices...
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Economics
Coca-Cola and the Price of Sugar In 1985, the Coca-Cola Company
was faced with soaring prices for cane sugar. A 1-cent increase in
the price of cane sugar raised its total cost by $20 million.
Rather than raise the price, the company looked for a cheaper input
and replaced cane sugar with corn sugar. Because corn was more
plentiful in the United States, it was cheaper to produce. Answer
the following questions: 1. Why couldn’t the Coca-Cola Company
simply raise the price? 2. Is sugar a fixed or variable input? 3.
Did the switch in the input lower TC? VC? FC? ATC? AFC? AVC?
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