Show the impact on price elasticity of demand, Microeconomics

Q. Food purchases are relatively price inelastic since food is a necessity. If food is so required for life, how will we explain the heavy advertising of food items at the grocery stores -  how could that impact the price elasticity of demand for the distinct food products?

ANSWER:   It is possible for the demand for a general class of goods to be price inelastic (such as food in general) but for shopping at any given brand or for any given store to be very price elastic due to the large number of stores selling essentially identical goods, or due to the number of food items that will be substitutes for each other. For illustration, there are more than 10 different brands of yoghurt, and consumers can be very price elastic in terms of preferring to buy the brand of yoghurt which is on sale at a given store.

Posted Date: 7/22/2013 8:40:09 AM | Location : United States

Related Discussions:- Show the impact on price elasticity of demand, Assignment Help, Ask Question on Show the impact on price elasticity of demand, Get Answer, Expert's Help, Show the impact on price elasticity of demand Discussions

Write discussion on Show the impact on price elasticity of demand
Your posts are moderated
Related Questions

what will be the possible concequences if a large scale like Toyota place its new product in Indian market without having forecast the demand for its product

how do you calculate opportunity cost

The Acme Bakery in the seaside resort town of Malvino sells freshly baked bread to two categories of consumers: residents of the town and tourists. The weekly demand from touris

What is the explanation for SAC to be tangent to LAC?(In other words, why must both be tangent to each other)?

Australians are turning to scooters to combat escalating petrol prices. After a slump in the March quarter this year, demand for scooters was up by more than 7 per cent in the firs

why is choice inevitable in the understanding of economics science?

Current Cropping Pattern: It is evident from these data that foodgrains constitute the most dominant  crop group that is cultivated in India. It is estimated that total croppe

Problem 1: (a) Critically examine the differences between the Neo-classical growth models and the endogenous growth theory. (b) Show the relevance of such models in explain