Implications for each of the computed elasticities for the business regarding short-term and long- term pricing strategies.
Income elasticity (EI) computed as 1.62 and 0.096 for options 1 and 2 respectively demonstrates that a one percent expansion in normal region salary may prompt to an increment of amount requested; with the expansion in amount request anticipated to rate at 1.62% and 0.096% for option 1 and 2 respectively. In that capacity, the item delineates flexibility. The last nature and result demonstrate promote that the firm may take part in augmentation value systems in circumstances where an ascent in normal pay comes about.
In the case of the region’s microwave ovens, elasticity (EM) is figured at 0.0700. The outcome depicts that a 1% expansion in the quantity of
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Given that corresponding changes in price are stated as 100, 200, 300, 400, 500 and 600, and that
Q = -7909.89 = 79.1P,
Price substitution in the equation (Q = -7909.89 = 79.1P) gives:
-7909.89 + 79.1 (100) = 0.11
-7909.89 + 79.1 (200) = 7910.11
-7909.89 + 79.1 (300) = 15820.11
-7909.89 + 79.1 (400) = 23730.11
-7909.89 + 79.1 (500) = 31640.45
-7909.89 + 79.1 (600) = 39550.11 iii) Determining the equilibrium of price and quantity
The demand equation is computed as follows keeping all other factors constant:
Q = -5200 -42(P) + 5.20(5500) + 20(600) +0.2500(5000) + 0.20(10,000)
We get Q = 38,650 – 42P
On the other hand,
P = 38,650/42 - Q/42
Hence,
P = -5200/45 + Q/45, as Q = 5200 =45P
A parallel solution of the supply and demand curves gives,
5200 + 45P = 38,650 - 42P
Thus, 87P = 33,450
Hence,
P = 384.48 while Q = 5200 + 45(384.48)
We get Q = 22,501.6 iv). Significant factors that could cause changes in demand and supply for the low-calorie, microwavable frozen food. Determining the primary manner in which both the long-term and the short-term changes in market conditions could affect the demand for, and the supply, of the
1.To increase prices according to 4th scenario (total line price increase by 5%) and from short-term revenues income use resources for advertising.
This highlights that a core principal of economics is the decisions and choices to be made in order to manage limited resources. Furthermore, that microeconomics pertains to the behaviours that affect these decisions and choices made at an individual level. As demonstrated by the avocado industry recently, motives and variable factors for increases/decreases in supply and demand will not always be transparent to the consumer. Therefore, to have an understanding of the concepts of microeconomics and the market can elucidate the individual consumer’s decision making rationale rather than making
2. Consumers: The emergence of dual career families resulted in unavailability of sufficient time to cook food. Hence interest and love towards such frozen food is increasing1. Type of meal 2. Brand 3. Variety.
The sales director proposed that if the firm were to reduce the price of Item 345 to FF15.00/m, they would be able to increase sales to 175,000 units (or 25% of industry volume). But if they were to keep the price at the current value of FF20.00/m, they would be able to sell not less than 75,000 units (or 11% of industry volume).
In “To Fix Income Inequality, The Have Nots Must Become The Do Somethings”, Pennington interprets that socialism challenges America’s free market to thrive, due to of the lack of creative power one needs to economically conquer. Income economic inequality is the gap between the rich and poor. Conflict over this topic commonly arises from the capitalist and socialists. Both groups have absolute different opinions on how the economy should be run. The beauty of a capitalist market is anyone can construct gains at any time; so there is no excuse to be jealous of the wealthy. A capitalist view is to look at the “glass half full or half empty”, as a few might say. When people look at their own wealth, it is not all based on your income, but the
Differences: Although both lines are new product concept, which try to target similar customer segment who are interested in Italian food, market potential might vary for different product line. First in terms of positioning, in pasta market, dry and frozen pasta occupied large market share due to its higher accessibility than fresh past sold at specialty store and restaurants. This might explain the fact revealed by research that 77% of respondents in favor of fresh pasta concept never purchased fresh pasta before. Therefore, wide distribution of refrigerated pasta will serve customers?desir...
When new competitors enter the market, they will have high costs of production due to the lack of economies of scale.... ... middle of paper ... ... The employees’ earnings and promotions were determined in direct proportion to their individual compensation towards the company’s success.
Income inequality has been a noticeable problem for the past thirty years within the United States of America. There has been great speculation about why the gap between the rich and the poor has widened over time, yet many American citizens seem to put the blame on the United States government. Perhaps there is some truth to that, but it should also be understood that public opinion isn’t always correct. The United States government has the ability to narrow the wealth gap and has done so through particular benefits and policies they have put forward.
It provides a set of minimum wages and working conditions for employees specific to their industry, job classification, occupation or the type of work they conduct. Hence, it would simplify thousands of wards that currently exist in the federal award system. Modern Awards can also contain a flexibility clause which means that employers and employees are able to negotiate changes in workplace arrangements to meet their individual needs. It helps promote the goal of equity and efficiency as it established a set amount that is required for the employees for their work within the labour force and encourages them to further to continue their work.
((500-400)/( 11.47 3.85)) * (11.47 6.90) = 249.34 + 100 = 349.34 or 350
Elasticity is also prominent to businesses. The price elasticity of demand is very important for companies to determine the price of their products and their total sales and revenue. Newell showed that by cutting the price of the Left 4 Dead game in half to $25 during a Valve promotion, its sales increased by 3000 percent (Irwin, 2009)viii.
Distinguish clearly between the Income and the Substitution Effects of a change in the Price of a Good. Under what Conditions will the Income Effect and the Substitution Effect act in Opposite Directions?
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a product's price elasticity of demand (McConnell & Brue, 2004). Market goods can be described as elastic or inelastic goods as change in quantity demanded for that good. If demand is elastic, a decrease in price will increase total revenue. Even though a lower price would generate lower sales revenue per unit, more than enough additional units would be sold to offset lower price (McConnell & Brue, 2004). In a normal market condition, a price increase leads to a decreased demand, and a price decrease leads to increased demand. However, a change in income affecting demand is more complex.
In the short-run the price elasticity of demand is high, however, in the long run the elasticity is not very high (Pascal 1967).
To accomplish these objectives, the Holland Enterprise will provide a compensation program that establishes and maintains competitive salary levels within the mark...