Explain how the following factors will shift the demand curve for Gillette shaving cream
a. The price of a competitor's shaving cream increases.
b. With an increase in unemployment, the average level of income in the economy falls.
c. Shaving gels and foams, marketed as being better than shaving creams, are introduced in the market.
a. Since Gillette and other shaving creams are substitutes, an increase in the price of a competitor's shaving cream should lead to an increase in the demand for Gillette shaving cream. This means that the demand curve for Gillette shaving cream will shift to the right.
b. With a fall in the average income level, the demand for shaving cream is likely to fall. The demand curve for Gillette shaving cream will shift to the left.
c. Shaving gels and foams would be considered substitutes for shaving cream. The demand curve for Gillette shaving cream will shift to the left.
You might also like to view...
According to Kuznets (1954), competition will
(a) unfairly destroy leading industries and impede overall economic growth across industries. (b) require government intervention. (c) push efficient industries into leadership roles and pull the backward and forward industrial links to these leaders with them. (d) contract consumer market opportunities.
Price elasticity of demand is defined as
a. slope divided by price. b. percentage change in price divided by percentage change in quantity demanded. c. percentage change in quantity demanded divided by percentage change in price. d. the inverse of the price elasticity of supply.