CASE ANALYSIS :- ESTIMATION OF THE DEMAND FOR ORANGES BY MARKET EXPERIMENT

PRESENTED BY:-GROUP 1 Anand Dhawan 03 Ashu Goyal 04 Kundan Kumar Sagar 02

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Price Elasticity of Demand What edit Master subtitle style Click to is Price Elasticity ? Price elasticity of demand (PED) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in 5/2/12

Cross Price Elasticity of Demand

The Cross-Price Elasticity of the demand measures the responsiveness of the demand for a good to a change in the price of another good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good.
For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are fuel inefficient decreased by 20%, the cross elasticity of demand would be: -20%/10%=-2
A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products. These two key relationships go against one's intuition,.

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Market Research Approaches

Consumer Surveys involve questioning a sample of consumers about how they would respond to particular changes in the price of the commodity and of related commodities, to changes in their incomes, and to changes in other determinants of demand. Consumer Clinics are laboratory experiments in which participants are given a sum of money and asked to spend it in a simulated store to see how they react to changes in the commodity price, commodity packaging, displays, prices of competing commodities, and other factors affecting demand. Market Experiment the researcher changes the commodity price or other determinants of demand under experimental control (such as packaging and the amount and type of promotion) in a particular real-world store or stores and examines consumers 5/2/12 responses to the changes.

CASE ANALYSIS
Grand Rapid was Chosen as the site because of the Size , Demographics, and Good Economic Base. Three type of Oranges were chosen Sample for the Experiment was nine Supermarkets Time Period was consecutive 31 days, to avoid the effect of Inflation and other Determinants. Supply of the oranges are in adequate to minimize the Supply effect .

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Price Elasticity and Cross Price Elasticity Demand

Types of Oranges Florida Indian River Florida Interior California

Florida Indian River -3.07 Price +1.16

+1.56

+0.01

Florida Interior

-3.01 Elasticity +0.09

+0.14

California

+0.18

-2.76

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CASE ANALYSIS

Consumer Responses to the changes were evaluated by the Researchers. Intentions were also

Consumer

evaluated.

Used

to forecast a firms sales or demand.

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