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Going nuts for Nutella

Penny Brooks

26th January 2018

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French consumers are showing what must be almost infinitely elastic price elasticity of demand for Nutella. Supermarket Intermarche have discounted the price by 70%, from 4.50 euros a jar to 1.40 euros, presumably as a loss-leader to bring customers into their stores so that they will buy the rest of their groceries as well while they are there.

The response is extreme - they sold out in 15 minutes, with customers battling to get to the shelves. The police had to be called to stem the violence - "They are like animals. A woman had her hair pulled, an elderly lady took a box on her head, another had a bloody hand," one customer told French media. Have a look at the video in this report, and try to estimate the PED!

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Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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