The demand for Olin skis is likely to be?
a. less elastic than the demand for skis in general
b. more elastic than the demand for skis is general
c. unit elastic relative to the demand for skis in general
d. as elastic as the deman for skis in general
e. greater than the demand for skis in general
To determine the likely elasticity of demand for Olin skis, we need to consider the factors that influence demand elasticity. The elasticity of demand measures how responsive the demand for a product is to changes in its price.
To compare the demand for Olin skis to the demand for skis in general, we need to assess the unique characteristics of Olin skis that could affect their elasticity. Here are a few key factors to consider:
1. Availability of Substitutes: If there are many substitutes available for Olin skis, the demand for Olin skis is likely to be more elastic. Consumers can easily switch to alternative brands if the price of Olin skis increases.
2. Necessity or Luxury: If Olin skis are considered a luxury item, the demand is likely to be more elastic. Luxury goods typically have more elastic demand as consumers are more price-sensitive and can easily postpone or cancel their purchases.
3. Brand Loyalty: If there is a high level of brand loyalty among consumers for Olin skis, the demand is likely to be less elastic. Consumers who have a strong preference for Olin skis may be less responsive to price changes and continue to purchase them even if the price increases.
Based on these factors, it is difficult to determine the likely elasticity of demand for Olin skis without more information. However, we can rule out options a and e since they represent extreme scenarios.
Therefore, the most reasonable answer would be either c. unit elastic relative to the demand for skis in general, indicating that the demand for Olin skis is equally responsive to price changes as the demand for skis in general, or d. as elastic as the demand for skis in general, suggesting that the demand for Olin skis has a similar level of responsiveness to price changes as the overall demand for skis.