A recent report brought out that Aldi, the German-owned supermarket is committing to drop their prices for some staple products such as free-range eggs, cheese and mince. This price reduction is going to be as high as 30%. It comes in when people are finding grocery shopping unaffordable given that many have lost their jobs or work reduced hours. The CEO of the Retail Doctor Group Brian Walker believes that this 'Good Different' strategy of Aldi would position it as a challenger brand in Australia. You are a Business Economics specialist and Steven Cain, the CEO of Coles Supermarket is curious about Aldi's strategy and wants you to prepare a report addressing the following:

1) Will Aldi's 'Good Different' strategy be sustainable given that the suppliers will shoulder the losses? Can Aldi continue with this kind of offer? Present your arguments based on the relevant economic principles. Will the price reduction by Aldi alter the demand and supply patterns? Use diagrams to support your answer.

2) Based on your findings of the change in the demand and supply pattern, suggest the relevant type of elasticity for any THREE Aldi products that people would usually buy. Using your own numbers, calculate ONLY the elasticity of demand using the mid-point formula for these three products. It would be good to use diagrams to explain yourselves better.

3) What effect do you see on the Aldi's revenue/profit if they chose this 'Good Different' strategy? Explain if it would be profitable or not for Aldi and suggest 3-4 steps that can be adopted by Aldi to offset the negative impact (if there is any).

4) How will the consumer and producer surplus change with the proposed reduction in price? Explain with the help of relevant diagrams. 5) Identify the relevant market structure for Aldi and provide necessary justification with reference to its characteristics.