Question

In the case that a preferred brand is not available, which of the following consumer product types will a shopper be most likely to choose a substitute brand?

Answer 1

Shoppers are most likely to choose substitute brands for products with elastic demand due to close substitutes available. Factors like taste changes, population decrease, income changes, and competitive pricing influence this choice. A market with many similar options is not monopolistic, offering more choices for substitution.

Step-by-step explanation:

In situations where a preferred brand is not available, a shopper is most likely to choose a substitute brand for a consumer product that has close substitutes available. This is because the demand for such products is more elastic, meaning consumers are more willing to switch to an alternate product rather than paying a higher price for their first-choice brand. Factors like a taste shift to lesser popularity, a decrease in the population likely to buy, an income drop (for a normal good), or a fall in the price of substitutes can all cause consumers to opt for a different brand.

Furthermore, if there are a variety of similar options from other firms, the original firm does not have a monopoly on the market. This availability of alternatives makes it easier for consumers to find a satisfactory substitute when their preferred brand is not available.