Question

One research study found that the price elasticity of demand for

beer is equal to -0.30 . Would you expect the price elasticity of a
brand of beer, such as Coors Light, to be different from -0.30
?

Answer 1

The price elasticity of demand for a specific brand of beer, such as Coors Light, may be different from the overall price elasticity of demand for beer in general. Factors such as brand loyalty, advertising, taste preferences, and substitutes can influence the price elasticity of demand for a specific brand.

Step-by-step explanation:

The price elasticity of demand for a specific brand of beer, such as Coors Light, may be different from the overall price elasticity of demand for beer in general. This is because different brands of beer may have different characteristics and appeal to different consumer segments, leading to variations in their price elasticity of demand.

Factors such as brand loyalty, advertising, taste preferences, and substitutes can influence the price elasticity of demand for a specific brand. For example, if Coors Light has a strong brand following and loyal customers who are not very sensitive to price changes, its price elasticity of demand may be smaller (less elastic) than the average elasticity for beer.

Therefore, it is possible for the price elasticity of a specific beer brand, like Coors Light, to be different from the -0.30 found in the research study for overall beer demand.