Assignment 3 Long-Term Investment Decisions Low Calorie Microwavable food

Investment decisions: Low Calorie Microwavable food

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The demand function for low calorie microwavable food depends on the price of the good, its competitive good, advertisement expenditure and income of the consumer.

From the demand function and the elasticities calculated, it is found that the market for the low calorie microwavable food belongs to a monopolistically competitive market. A monopolistic competitive is characterized by a fair number of buyers and sellers. Therefore people can switch to another brand if a particular brand charges a high price. But a monopolistic competitive seller performs product differentiation. Thus he attracts the...