With Groceries ….. How do the laws of demand interact to establish prices in the economy?

SUBSTITUTES AND COMPLEMENTS

With Groceries ….

Essential Question

How do the laws of demand interact to establish prices in the economy?

Substitutes

A substitute is something that can be used INSTEAD of a particular good or service.

Substitutes can impact quantity demanded.

Goods that are substitutes satisfy the same set of goals or preferences.

good substitution is an economic concept where two goods are of comparable value.

201164 wipes

$1.9780 wipes

$1.782012

56 wipes $1.97

72 wipes $1.78

Baby Wash Comparison

Why is the price so much more expensive for Johnson’s brand?

Sour Cream Comparison

Same Price

Which brand would you buy if the Kraft brand and Walmart brand were the same price?PRICE DECREASED IN 2012 TO $1.48 .. 10 CENTS CHEAPER.

Cheese Slices Comparison

2011$2.58 VS $2.88

2012$2.53 VS$2.98

Bottled Water ComparisonDeer Park (that’s good water) for $3.98 and Great Value for $2.97

Dr. Pepper and Dr. Thunder

Why is there such a price difference?Do the products taste the same?

PRICES THE SAME IN 2011 AND 2012 !!!

Coca-Cola VS Sam’s Cola

PRICES THE SAME IN 2011 AND 2012.

Lays VS. Great Value Brand

WALMART PRICES STAYED THE SAME, BUT LAY’S INCREASED BY 10 CENTS IN 2012, FROM 2011.

Bleach – what is worth those 34¢??

WOW! HUGE Price Difference.WALMART PRICE REMAINED THE SAME .. CASCADE DECREASED TO

$15.46 IN 2012, WHICH IS $2 LESS THAN 2011.

Disinfectant Spray $2 difference?

Windex, Glass Plus, Great Value$2.47, $1.98 and $.97

Toilet Paper. Is price worth comfort ?

Bounty Quicker Picker Upper – worth over $1.30 ?

Very GENERIC brand 50 cents for 60 sheets in 2012.

Sample in class …

Do you think the name brand is worth the cost ???

58¢ difference – why ?

2011 prices shown.2012 the same, except Nutri-Grain is now $2.50 (cheaper) !!!!

Red Solo Cups …

40 more cups, but clear …worth 60¢ ??

Cap’n Crunch and Berry Crunch

2011 prices shown2012 prices :

Berry Crunch $2.54Cap’n Crunch $3.00

Last year, this same product was $2.00 ..

2011 and 2012 Prices were the same.

Cookies !!!

2011 Great Value brand actually rang up at $2.18, so the difference is even greater ….

2012 Great Value $1.98 (size smaller?)

Chips Ahoy $2.50

Strawberry Preserves

White Bread .. $1.30 difference?

Same price in 2011 and 2012.

Nail Polish Choices

So many choices …

Complements

Complements are items which are used in conjunction with one another.

Peanut butter and jelly are complementary items. Theoretically, if the price of peanut butter goes up, people will buy less peanut butter and less jelly because peanut butter and jelly are typically purchased together.

Peanut Butter and Jelly

Complements

Valentine’s Day Aisle

Review

The thing to remember is this: The prices of substitutes and complements are among the determinants of demand.

Compliments and substitutes illustrate the difference between changes in quantity demanded vs. changes in demand.