Can anyone help me???
Rank the products below in ascending order in terms of price elasticity of demand: A chicken meal, food for dinner, a soft drink after a dinner, a fruit desert after a dinner.
Here's my guess, but you probably know more about the topic than I do:
food for dinner, a chicken meal, a fruit dessert after a dinner, a soft drink after a dinner
What did you guess?
Thx Brie... well i was thinking about the same answer!! thx anyways
To rank the products in ascending order in terms of price elasticity of demand, we need to consider the responsiveness of consumer demand to changes in price. The more elastic the demand, the more responsive consumers are to price changes. Here's a step-by-step approach to determining the ranking:
1. Understanding price elasticity of demand: Price elasticity of demand measures the percentage change in quantity demanded in response to a percentage change in price. If demand is highly responsive to price changes, it is considered elastic, whereas if demand is not very responsive, it is considered inelastic.
2. Analyzing consumer behavior: When determining price elasticity of demand, several factors can influence the degree of responsiveness, including availability of substitutes, necessity of the product, and the portion of income spent on the product.
3. Analyzing the products: Let's consider the four products mentioned – a chicken meal, food for dinner, a soft drink after dinner, and a fruit dessert after dinner – based on the factors mentioned above:
- A chicken meal: Since chicken can often be substituted with other proteins (such as beef or fish), the demand for a chicken meal might be relatively elastic.
- Food for dinner: If we assume this category includes a wide variety of food options, the price elasticity of demand will depend on the specific food items. Generally, when it comes to staple food items, the demand tends to be more inelastic as these items are essential and have fewer substitutes.
- A soft drink after dinner: Soft drinks usually have a high availability of substitutes, which can make the demand more elastic.
- A fruit dessert after dinner: If we assume that there are many alternative options for dessert, the demand can be relatively elastic.
4. Ranking the products: Based on the analysis above, here's a possible ranking in ascending order of price elasticity of demand:
- Food for dinner (assuming it includes staple food items)
- A chicken meal
- A fruit dessert after dinner
- A soft drink after dinner
Please note that this ranking is based on assumptions and generalizations. The actual price elasticity of demand for these products may vary depending on various factors specific to the market and consumers.