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Orange growers in Australia have faced declining incomes, because of
the relative cheapness of Brazilian orange juice concentrate. As tariffs
(taxes on imports) are reduced, orange juice producers have switched to
imported orange juice concentrate. Australian orange growers have responded
to this challenge through a media campaign that highlights the loss of
sales and thus employment in rural Australia. The campaign has been successful;
many orange juice manufacturers now make a point of advertising that all
oranges used in their products are 100% Australian grown. Oranges can be
differentiated by their place of origin. However, many
cheaper brands of orange juice continue to use imported fruit concentrate.
Goods and services trading in monopolistically competitive markets have
close substitutes; thus these items have elastic demand curves. The goods
and services are said to be price sensitive.
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