Explain why the supply-and-demand model should not be used to analyze

Explain why the supply-and-demand model should not be used to analyze the market for jeans.

What will be an ideal response?

ANSWER

Products in the jeans market are not identical (at least not in the consumers’ eyes). The fact that there is only one manufacturer per brand gives that particular firm (limited) power over the price of its product. Thus, two conditions for the use of the model are not fulfilled.