ECO2023 Chapter 6 Discussion Questions A brand loyal consumer is a consumer who has a strong positive association with a product. In these questions we will be concerned with a brand loyal consumer to Starbuck's iced coffee. The consumer strongly prefers consuming iced coffee from Starbucks when considering iced coffee from brands available. We would like to examine how this consumer will respond to change. a) Define elasticity. (25pts) b) If Starbuck's increases the price on its iced coffee, would we most likely expect a more elastic or inelastic response for the price elasticity of demand of the brand loyal consumer? Why? (25pts) c) If Dunkin' Donuts were to decrease the price on its iced coffee, would we expect demand for Starbucks iced coffee to increase or decrease by the non-brand loyal consumers? What type of goods are Dunkin' Donuts and Starbucks iced coffee as a result? (25pts) d) If the brand loyal consumer begins earning additional income, would we expect a positive or negative value on the income elasticity of demand? what type of good is Starbucks coffee as a result? (25pts)