1. Think of some advertisements which deliberately seek to make demand less elastic. 2. Imagine that Sunshine...
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1. Think of some advertisements which deliberately seek to make demand less elastic.
2. Imagine that ‘Sunshine’ sunflower spread, a well-known brand, is advertised with the slogan: ‘It helps you live longer’. What do you think would happen to the demand curve for a supermarket’s own brand of sunflower spread? Consider both the direction of shift and the effect on elasticity. Will the elasticity differ markedly at different prices? How will this affect the pricing policy and sales of the supermarket’s own brand? What do you think might be the response of government to the slogan?
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