Introduction to Microeconomics Essay Example | Topics and Well Written Essays - 500 words - 3

Introduction to Microeconomics - Essay ExampleOwing to high middle-class population growth in these countries, the food processors other than Nestl gutter also experience shift in hire of their products. insofar, determinant of Nestls shift in ingest is not only the emerging markets innate potential but also the increasingly appealing behavior of consumers in these markets towards Nestl brands.In the light of this strong shift in demand, Nestl can sanitary forward rising in compose costs to its consumers without much affecting the sale-volume. This reflects relatively inelastic demand for Nestl products in emerging markets, developing a high r tear downue-potential to Nestl even in pace of rising input costs.Besides Nestl, overall food processed market (mainly the food makers as Peers Danone and Unilever) can also effectively put into practice the rise in price in response to the rising food costs since the rightward shift in processed foods market demand can well low gear the leftward shift in its market supply thus raising the markets equilibrium quantity with price. Yet by raising its price, food maker, Kraft Foods, may hurt its quantity demanded, and thus demand, due to elastic nature of its products demand leftward movement along its demand curve, which is due to increased prices owing to left-shifted supply, may offset the rightward shift in its emerging markets demand.Further, due to its larger market share, Nestl can capture the large lay out of this shift in market demand shift in Nestl products demand is expected to be larger than the shift in other food makers demand thus, rise in its equilibrium quantity should also be higher than others.VEVEY, Switzerland (Reuters) - Nestle, the worlds biggest food maker, said strong demand in emerging markets would help it offset a steep rise in input costs in 2011 after it beat sales forecasts for 2010.We saw a significant uptick in natural material prices in the second half, Chief Financial