The demand for Cinnamon Toast Crunch brand cereal is:
A) equally elastic to the demand for cereal in general.
B) less elastic than the demand for cereal in general.
C) more elastic than the demand for cereal in general.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

The demand for a specific brand of a product, like Cinnamon Toast Crunch, is generally more elastic than the demand for the product category as a whole (cereal in this case) because consumers can easily switch to other brands if the price of Cinnamon Toast Crunch increases, whereas they have fewer substitutes for the category of cereal as a whole.

The Demand for Cinnamon Toast Crunch Brand Cereal Is