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Why is the concept of price elasticity of demand potentially very uesful to a businss?
Wiki User
∙ 12y ago
It can be used to calculate quantity sold to optimise profit, since the price elasticity of demand, multiplied by revenue, describes the total change in revenue (MR) per unit sold.
Wiki User
∙ 12y ago
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Why is elasticity of demand a fine theoretical concept of economists but difficult for marketers to use in practice?
it is what elasticity of demand
Why is elasticity an important concept for a business like beachfront properties?
Elasticity an important concept for a business like beachfront properties because it determines how much the value of the property could potentially fluctuate. If the price goes down, demand increases.
How to use the concept of price elasticity of demand to maximize revenue?
Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.
Why is the concept of price elasticity of demand potentially very useful for a business?
Role of price elasticity in business decision: See every producer has to decide the price of a product ar which he has to sell it.While deciding it,price elasticity of demand becomes important for him.If the demand of his productis less elastic,he will fix up a higher price or vice-versa. The concept of price easticity helps the producers` when they havetodetermine the price of jointlypouced goods. For example: oil and oil cakes are two joint goods.If the demand for oil is inelastic as compared to the demand for oil cakes,a higher price for oil is charged.
What are the 3 types of elasticity?
1)price elasticity of demand 2)income elasticity of demand 3)cross elasticity of demand
Why is elasticity of demand a fine theoretical concept of economists but difficult for marketers to use in practice?
it is what elasticity of demand
Why is elasticity an important concept for a business like beachfront properties?
Elasticity an important concept for a business like beachfront properties because it determines how much the value of the property could potentially fluctuate. If the price goes down, demand increases.
What is meant by concept of elasticity of demand?
The degree of responsiveness of change in demand as a result of change in its price is known as elasticity of demand. I mathematical language we can say that; Elasticity of demand = %age change in Quantity Demanded DIVIDED BY %age change in the Price.
How to use the concept of price elasticity of demand to maximize revenue?
Price elasticity of demand is a way to determine marginal revenue. Optimal revenue and, more importantly, optimal profit will occur to the point when marginal revenue = marginal cost, or the price elasticity of demand < 1.
Why is the concept of price elasticity of demand potentially very useful for a business?
Role of price elasticity in business decision: See every producer has to decide the price of a product ar which he has to sell it.While deciding it,price elasticity of demand becomes important for him.If the demand of his productis less elastic,he will fix up a higher price or vice-versa. The concept of price easticity helps the producers` when they havetodetermine the price of jointlypouced goods. For example: oil and oil cakes are two joint goods.If the demand for oil is inelastic as compared to the demand for oil cakes,a higher price for oil is charged.
Explain the concept of income elasticity of demand and how it is calculated?
When you have less income you tend to consume less.
What are the 3 types of elasticity?
1)price elasticity of demand 2)income elasticity of demand 3)cross elasticity of demand
If the elasticity of demand is equal to one then the demand is?
Unitary elasticity is when the price elasticity of demand is exactly equal to one.
Distinguish between price and income elasticity of demand?
distinguish between price elasticity of demand and income elasticity of demand
Method for measurement of Elasticity of Demand?
there are three methods of measuring elasticity of demand
Would the concepts of cross elasticity of cross elasticity of demand and income elasticity of demand be of any interest to a pharmaceutical company?
I am at a loss for the answer please help me.
Cross elasticity of demand?
In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demand of a good to a change in the price of another good.
