Demand for a product category (such as pizza) may be inelastic, while the demand for specific brands of this product (such as Pizza Hut) may be elastic.

Question

Quizplus · Accepted Answer

Demand for a product category can be inelastic if consumers are generally not very responsive to price changes for that category (e.g., people need to eat, so they'll buy food like pizza regardless of minor price changes). However, demand for specific brands within that category can be elastic because consumers can be more sensitive to price changes when they have the option to substitute one brand for another (e.g., choosing a cheaper pizza brand over Pizza Hut if prices rise).

Demand for a Product Category (Such as Pizza) May Be