Hovis Elasticity

The brand of Hovis bread is losing money while raising its price. This single statement shows that Hovis has a very elastic price of demand. Since the prices are going up to unprecedented numbers, many consumers are responding strongly and are buying less of the brand. Also, the rise in price of Hovis went up before the other brands of bread. Therefore, the substitutes’ prices were still lower, which meant that more people would buy the cheaper bread. This again shows the high elasticity in demand of Hovis because the prices of the substitutes made the consumers respond.

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