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#18 - iamlying (07/04/2013) [-]
Price Elasticity of Demand.
People who buy the smaller coke usually buy it for convenience (as in on the go when they are already out) so therefore will be less responsive to price changes, to the price can be quite high.
The larger coke is usually bought when people want coke at home, so they will look for better prices and hence be more responsive to price changes, hence the lower price.
The small water is priced high for the same reason as the coke is priced high. Plus water doesn't have that many substitutes (if you don't want coke, you can get pepsi (inb4 they're different), but if you want water you will likely be very thirsty). Thus small water is priced highest.

Thus concludes today's economics lesson.
#34 to #18 - extremistavenger (07/04/2013) [-]
Mr.Iamlying, will this be on the test next week?
#28 to #18 - wigglesborth (07/04/2013) [-]
Why should I listen to a liar?
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