Asma Ba’OmarManagerial EconomicMBA723-02To:Dr. Vern PierceFrom: Asma H. Ba’OmarDate: August 4th, 2017Subject: WK 1 – Business Brief: Elasticity of PriceBusiness BriefFor this business brief, I chose to talk about the price elasticity of Nescafé instant coffee.The reason behind my choice is because I am a loyal customer to the brand, and I was curiousto learn more about the product in term of its price elasticity of demand and what factorsinfluence it.The Major Determinants:Coffee is not an essential product, but it is considered to be a habit-forming or an additiveproduct, therefore the demand for coffee is inelastic (Gillespie, 2016). Many argue that coffeehas substitutes, such as tea, in case the price increases, but that is true to some extent. In myopinion, there are people who define themselves as coffee-drinkers and others who definethemselves as tea-drinkers. After establishing that the demand for coffee as a whole is likelyto be inelastic as the demand for it is relatively stable (Hirshleifer, Glazer & Hirshleifer,2005), we can say that the demand for Nescafé as a brand for instant coffee is more elastic.
