E₁ is demand elasticity for Minute Maid orange juice, E₂ is demand elasticity for all orange juice, and E₃ is demand elasticity for all fruit drinks. Then A) |E₁| |E₂| |E₃| B) |E₂| |E₃| |E₁| C) |E₃| |E₁| |E₂| D) |E₃| |E₂| |E₁|

Question

E₁ is demand elasticity for Minute Maid orange juice, E₂ is demand elasticity for all orange juice, and E₃ is demand elasticity for all fruit drinks. Then A) |E₁| > |E₂| > |E₃| B) |E₂| > |E₃| > |E₁| C) |E₃| > |E₁| > |E₂| D) |E₃| > |E₂| > |E₁|

Quizplus · Accepted Answer

The demand elasticity of a product typically increases with the breadth of its category. Minute Maid orange juice, being a specific brand, would have a higher elasticity than the broader category of all orange juice, which in turn would have a higher elasticity than the even broader category of all fruit drinks. This is because consumers can more easily find substitutes for a specific brand than for a broader category of products.

E1 Is Demand Elasticity for Minute Maid Orange Juice, E2

E₁ Is Demand Elasticity for Minute Maid Orange Juice, E₂