The Elasticity of Coca Cola
The demand, for Coca Cola products, is elastic. The soft drink industry is very competitive. Consumers have many different alternatives to Coke, that can be very close in taste. If consumers feel as if Coca Cola, is priced too high then they can choose to buy another brand of soft drinks. The demand for soft drinks as a whole is inelastic, because it is a consumer based market. If the price increases or decreases it will only have a small effect on the demand of the good. (McConnel, 2009)
How Does Pricing Relate to the Elasticity of Coca Cola
"Price Elasticity determines how much of an impact of a change in price will have on consumers purchasing a product" (McConnel, 2009). Price elasticity calculations are done by calculating the percent change in the quantity demanded of a good, and then dividing it by the percent change in the price for the good. A price elasticity of greater than one, indicates that good is elastic and very sensitive to changes in prices. A price elasticity of less than one determines that the good is inelastic. Price changes impact the quantities demanded by consumers. When the cost for Cokes is low consumers are more willing to buy more than what they need. Coca Cola is elastic, the company can increase their revenue by decreasing the cost of their product. (McConnel, 2009)
The Elasticity of Coca Cola
The demand, for Coca Cola products, is elastic. The soft drink industry is very competitive. Consumers have many different alternatives to Coke, that can be very close in taste. If consumers feel as if Coca Cola, is priced too high then they can choose to buy another brand of soft drinks. The demand for soft drinks as a whole is inelastic, because it is a consumer based market. If the price increases or decreases it will only have a small effect on the demand of the good. (McConnel, 2009)
How Does Pricing Relate to the Elasticity of Coca Cola
"Price Elasticity determines...