Economics class: Pret A Manger to increase cost of its coffee subscription by 20%
We’ll send you a myFT Daily Digest email rounding up the latest FT Schools news every morning.
This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.
Specification:
Costs and revenues, price elasticity of demand, cost-push inflation
Click to read the article below and then answer the questions:
Pret A Manger to increase cost of its coffee subscription by 20%
Distinguish between i) cost; and ii) price
What is the current rate of inflation as measured by the CPI?
Pret must think that demand is sufficiently robust to the extent that increasing the price of its subscription service will not reduce demand for its products. Using a diagram, analyse this train of thought in the context of price elasticity of demand
With the rate inflation set to halve by the end of the year, evaluate whether Pret will then reverse this price rise
Gavin Clarke, Emmanuel College
Comments