Show the impact on price elasticity of demand, Microeconomics

Assignment Help:

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.


Related Discussions:- Show the impact on price elasticity of demand

When tree berson shared , ahmed has 500 dolars.asma has 700 dolars.cismaan...

ahmed has 500 dolars.asma has 700 dolars.cismaan has 800 dolar

Economic growth, In his 2009 budget proposal for the U.S., President Obama ...

In his 2009 budget proposal for the U.S., President Obama wrote, "Unfortunately, we are also inheriting the worst economic crisis since the Great Depression which will force us to

Describe customer-firm relationship, Question 1: "The rush of new and e...

Question 1: "The rush of new and existing enterprises to exploit the opportunities presented by the internet economy is giving rise to new business models". Discuss. Ques

Policies for technological advance, Policies for Technological Advance ...

Policies for Technological Advance Without better technology, increases in capital stock generated by investment rapidly run into diminishing returns. And without improvements

the bundle containing more bread, Assume that John has the following prefe...

Assume that John has the following preference relation over two goods, bread and bear (x1, x2). He strictly prefers any bundle x over y whenever x haves more bear than y, whatever

Stoichiometry, 2ALBr3+3K2so4--->6KBr+1Al2(so4)3

2ALBr3+3K2so4--->6KBr+1Al2(so4)3

Bureaucracy, BUREAUCRACY: M de Gournay, an economist of France, first ...

BUREAUCRACY: M de Gournay, an economist of France, first coined the word Bureaucracy in the eighteenth century to refer to "a fourth or fifth form of Government" in which "off

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd