Assume an analyst has been hired to estimate the price elasticity of demand for Levi's brand blue jeans and for blue jeans in general.Ceteris paribus, we would expect the price elasticity of demand to be:
A) larger for Levi's brand blue jeans than for blue jeans in general.
B) larger for blue jeans in general than for Levi's brand blue jeans.
C) approximately the same for both Levi's brand blue jeans and blue jeans in general.
D) none of the above because the market for blue jeans cannot be analyzed using the model of supply and demand.

Question

Quizplus · Accepted Answer

The price elasticity of demand is typically larger for specific brands (like Levi's) because consumers can more easily switch to other brands if the price of Levi's increases. In contrast, the demand for blue jeans in general is less elastic because there are fewer substitutes for the product category as a whole.

Assume an Analyst Has Been Hired to Estimate the Price