Question #71091
Coca-Cola developed a vending machine that would sense the temperature and then
charge higher prices when it was hotter–a response to the increase in demand and the
Group
Assignment
Page 2 of 3
decrease in the elasticity of demand. Consumers found out about the new technology
and were outraged, causing Coca-Cola to shelve the idea.
2a) When does a firm have an opportunity to charge different prices to different
consumers?
2b) What Determines Price Elasticity of Demand for Coca-Cola? Explain and
provide graph illustration.
charge higher prices when it was hotter–a response to the increase in demand and the
Group
Assignment
Page 2 of 3
decrease in the elasticity of demand. Consumers found out about the new technology
and were outraged, causing Coca-Cola to shelve the idea.
2a) When does a firm have an opportunity to charge different prices to different
consumers?
2b) What Determines Price Elasticity of Demand for Coca-Cola? Explain and
provide graph illustration.
Expert's answer
Answer on Question # 71091, Economics / Microeconomics
2a) In the conditions of short-term development of the firm prices may vary depending on the consumer. This is due to the existence of positive economic processes in price formation.
2b) Price elasticity of demand depends on the level of change in prices for products of the firm and at the same time changes in the quantity of products.
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