Clorox Bleach and generic brands have the exact same proportions of chlorine and other active ingredients. The reason that people continue to purchase Clorox at twice the price of the generic brand is the
A) price elasticity of demand classifies them as belonging to the same market
B) low cross elasticity between Clorox and the generic brand
C) high cross elasticity between Clorox and the generic brand
D) perceived differences on the part of consumers
E) income elasticity of demand is higher for the Clorox brand

Question

Quizplus · Accepted Answer

The key reason people continue to purchase Clorox despite its higher price, compared to generic brands with the same active ingredients, is due to perceived differences. Consumers may believe Clorox is of higher quality or more effective, even if the chemical composition is identical. This perception drives their purchasing decision, not the actual product differentiation.

Clorox Bleach and Generic Brands Have the Exact Same Proportions