Scenario 1-5
Exodus Moving is a small business that was created to serve local furniture stores' delivery needs in the Boulder Colorado area.They have specialized equipment that allows them to lift and transfer large, bulky pieces of furniture with less risk of damage than most traditional movers.Many of these furniture stores do not sell enough volume to keep their own trucks and drivers busy all of the time, so Exodus fills a real market need.As a result, most such stores are very interested in outsourcing delivery service needs.Exodus has attracted many customers from these stores by guaranteeing 48 hour delivery within a 50 mile radius of any of the stores they serve.Eventually, Exodus hopes to attract the business of other retailers who might require delivery services.
-(Scenario 1-5) As a result of vigorous advertising, Exodus has created inelasticity of demand to price changes. Which of the following will hold true in such a situation?

Question

Quizplus · Accepted Answer

Inelastic demand means that customers are less sensitive to price changes, so they will be less likely to switch to a competitor or stop using Exodus' services due to price increases. This does not necessarily mean that they have low brand loyalty or that the company needs to lower its prices. Brand equity is not directly related to demand elasticity.

Scenario 1-5 Exodus Moving Is a Small Business That Was Created to Created