Discuss each of the factors that determine the price elasticity of a product with respect to the product or product category listed for your industry. 10 marks
Based on your answer to part (i) above, over a period of 6 months, do you think this product or product category is likely to have a price elasticity of demand that is elastic or inelastic at their current market price levels? 2 mark
The product or product category you should use for this question is-:
Supermarkets and Grocery stores in Australia – frozen vegetables (which are cut up & ready for cooking) purchased from these stores
Question 3.2:
The CEO of the Industry Association that works to advise firms in your industry wants to increase total revenue in your industry, and is considering advising all the firms in the industry to increase their recommended retail price for the appropriate product or product category as above in question 3.1. Write a short paragraph that explains to CEO of the Industry Association whether this is a suitable course of action for them to recommend, and why.
