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 is the theory of second best? Prove the theorem with the help of a diagram

I can''t figure out how to graph the aggregate consumption function and the aggregate saving function

Determine the Business Cycle and Classical Economists Business Cycle:   The business cycle is the fluctuations in the rate of economic growth that take place in the economy. Th

Equilibrium is explained as follows: Equilibrium is the state in which there are no shortages and surpluses; or we can say that the quantity demanded is equal to the quantity s

Mikes' preferences for consumption and leisure may be represented by the Utility function: u(C, L) =  ( C-200)*(L-80) . His marginal utilities of leisure and consumption are (C-200

what is indifference curve''s theory and application

Deficiency of Vitamin A Deficiency of Vitamin A has been found to impose adverse effects on roughly one third of the children below the age of five around the world. It has also be

Why short run average cost curve is ‘U’ shaped

Sources of monopoly power: The main sources of monopoly power include the following: (i) Control of the entire supply of a basic input . It only one firm has access to or co