# The Price Elasticity Of Demand Ratio Of The Percentage Change Essay

# The Price Elasticity Of Demand Ratio Of The Percentage Change Essay

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Ep=(P/Q) (-42)

Ep= (-42) (500/17650)

Ep= (-42) *0.0283= -1.189 or -1.19

Epx =20*(600/17,650)

Epx= 20*(0.0339)

Epx=0.68

Ei= 5.2(5500/17,650)

Ei= 5.2(3.116)

Ei= 1.62

Ea= 0.20(10000/17,650)

Ea= 0.20(0.566)

Ea= 0.1133

Em= 0.25(5000/17650)

Em= 0.25(0.283)

Em=0.07

McGuigan, Moyer & Harris (2014) describes the price elasticity of demand ratio of the percentage change in quantity demanded to the percentage change in price if all other factors of demand continue to be untouched (p.72). The price elasticity of demand is -1.19 it is called inelastic (McGuigan, Moyer & Harris, 2014). This means when demand elasticity is less than one in absolute value, an increase in price but result in a decrease in (P*QD). However, the customer total expenditure is directly related to the price. If the company strategy is to increase the price will affect the total revenue for the company. This will not be the best thing short term or long term.

The price of elasticity is negative -1.19 which means that the demand for the product is not doing will and we need to look at the cost. If the product is putting distress on demand, then the demand for microwavable food product decrease. It also indicates that there would effect the price both in the short term and the long term. Advertising elasticity: Ea = 0.20(10000/17,650) = 0.1133. The value of advertisement elasticity is positive (0.1133) meaning that the product is elastic to the advertisement and is less than one. The effect on the quantity demanded money used in a commercial in the short term and the long run. Income elasticity: Ei...

... middle of paper ...

...y. Shifts in the supply curve caused by changes in the price of the commodity. Variations in the demand curve could be due to the change in consumer taste preferences, prices of competitors, or income. The price of the product alters the request in commodity by shifting to the right or the left of the original demand curve.

Reference

Berg, S. V. (1972). An Economic Analysis of the Demand for Scientific Journals. Journal Of The

American Society For Information Science, 23(1), 23-29.

ERIC - An Economic Analysis of the Demand for Scientific ... (n.d.). Retrieved from

http://eric.ed.gov/?id=EJ054507

McGuigan, J.R., Moyer, R. C., & Harris, F. H. deB. (2014). Managerial economics:

applications, strategies and tactics (13th ed.). Stamford, CT: Cengage Learning.

Train, K., 2003. Discrete choice method with simulation. Cambridge, UK: Cambridge University

Press.

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