Which will be more elastic: the demand for Cadbury's Fruit 'n Nut or the demand for chocolate generally? Explain your reasoning. Consider the estimates of the price elasticity of d... Which will be more elastic: the demand for Cadbury's Fruit 'n Nut or the demand for chocolate generally? Explain your reasoning. Consider the estimates of the price elasticity of demand for certain foods shown in the following table. Explain why the demand for fruit juice is more elastic than that for milk. How do you explain the difference between the elasticity of demand for chicken and that for other poultry?
Understand the Problem
The questions are seeking to explore concepts related to price elasticity of demand. The first question asks for a comparison between two types of chocolate demand and reasoning behind it. The second question involves explaining observed differences in price elasticity for fruit juice versus milk, and the differences in elasticities concerning chicken and other poultry.
Answer
Cadbury's Fruit 'n Nut demand is more elastic.
The demand for Cadbury's Fruit 'n Nut is more elastic than the demand for chocolate generally. This is because specific brands tend to have more substitutes compared to a general category like chocolate.
Answer for screen readers
The demand for Cadbury's Fruit 'n Nut is more elastic than the demand for chocolate generally. This is because specific brands tend to have more substitutes compared to a general category like chocolate.
More Information
More specific products typically have more alternatives, making their demand more elastic.
Tips
A common mistake is to assume general categories have more substitutes than specific brands, which is often the opposite.
Sources
- Elasticity - Seminar Guide - quizgecko.com
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