Price Elasticity for

Real Juice

BY:
Ujjaval Patel
Akshay Kumar
Arindam Sarangi
Nishant Dhanopiya
Gaurav Palit
Luxury or necessity
 Real juice is not a necessity product hence expected demand curve will be
elastic. The likely PED is more than 1.
 Relationship between price and demand
1
𝐷𝑒𝑚𝑎𝑛𝑑 ∝ 𝑃𝑟𝑖𝑐𝑒

Demand curve
450
400
350
300
250
200
150
100
50
0
0 50 100 150 200 250 300 350 400 450
Price Elasticity PED
450

400
 Price elasticity of demand 350
1 300
𝐷𝑒𝑚𝑎𝑛𝑑 ∝
𝑃𝑟𝑖𝑐𝑒 250

200
%∆𝑞
𝑒= , e will be of negative nature 150
%∆𝑝
100

50

0
0 100 200 300 400 500

PES
450
400
350

 Price elasticity of Supply 300

250

Supply ∝ 𝑃𝑟𝑖𝑐𝑒 200

150
%∆𝑞
𝑒= , e will be of positive nature 100
%∆𝑝 50
0
0 50 100 150 200 250 300 350 400 450
Cross Elasticity Substitute
450

400
 Price elasticity of Substitute
350
𝐷𝑒𝑚𝑎𝑛𝑑 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 ∝ Price of substitute 300
%∆𝑞 250
𝑒 = %∆𝑝 , e will be of positive nature
200

Eg. Decreased price of Tropicana will lead to decreased 150

100
consumption of Real Juice 50

0
0 100 200 300 400 500

Complimentary
 Price elasticity of Complimentary 450
1 400
Demand of Product ∝ 𝑃𝑟𝑖𝑐𝑒 𝑜𝑓 𝑐𝑜𝑚𝑝𝑙𝑖𝑚𝑒𝑛𝑡𝑟𝑦 350
%∆𝑞 300
𝑒 = %∆𝑝 , e will be of negative nature 250
200
150
Eg. Increased price of sugar or fruit pulp will lead to increased cost100
50
of product hence price and decreased demand.
0
0 50 100 150 200 250 300 350 400 450