How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?
What will be an ideal response?
The price elasticity for Crest toothpaste is likely to be greater than the price elasticity for toothpaste as a product category. In general, toothpaste is considered by most consumers as a necessity, so demand should be inelastic. But demand for one brand, Crest, will be more elastic because there are many substitutes. On the other hand, Crest has created brand loyalty that would make the price elasticity of demand for their product less elastic.
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