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 question asks to compare the elasticity of demand for Cadbury's Fruit 'n Nut chocolate versus chocolate in general. Furthermore, it inquires about the price elasticity of demand for certain foods and explains why demand for fruit juice is more elastic than that for milk, and seeks an explanation for the elasticity difference between chicken and other poultry.
Answer
Cadbury's Fruit 'n Nut demand is more elastic than chocolate. Fruit juice is more elastic than milk due to more substitutes.
The demand for Cadbury's Fruit 'n Nut is more elastic than the demand for chocolate generally because specific brand choices have more substitutes than the entire category of chocolate. The demand for fruit juice is more elastic than that for milk due to the availability of more substitutes and its treat-like nature. Chicken might have a different elasticity than other poultry because it is a more common dietary staple.
Answer for screen readers
The demand for Cadbury's Fruit 'n Nut is more elastic than the demand for chocolate generally because specific brand choices have more substitutes than the entire category of chocolate. The demand for fruit juice is more elastic than that for milk due to the availability of more substitutes and its treat-like nature. Chicken might have a different elasticity than other poultry because it is a more common dietary staple.
More Information
Brands typically face more competition than the generic product, meaning demand is more sensitive to price changes. For food items, necessity versus luxury and availability of substitutes play a role in elasticity.
Tips
A common mistake is to assume broader categories have more elastic demand; however, specific brands or flavors often have more substitutes.
Sources
- Elasticity - Seminar Guide PDF - Quizgecko - quizgecko.com
- Understanding Elasticity of Demand - Course Hero - coursehero.com
AI-generated content may contain errors. Please verify critical information
