If consumers are not price sensitive in purchasing a consumer product such as Smucker's Jams,a 10% increase in the retail price of strawberry jam because of a 10% increase in the cost of strawberries from farmers will not affect demand for jam.Thus,the derived demand indicates that the demand for strawberries is:

Question

Quizplus · Accepted Answer

If a 10% increase in retail price does not affect demand for jam, it suggests that consumers are not sensitive to price changes. This typically indicates inelastic demand. Therefore, the derived demand for strawberries would also be inelastic, as an increase in the price of strawberries would not significantly impact the demand for strawberry jam.

If Consumers Are Not Price Sensitive in Purchasing a Consumer