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If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues.
Hudson Parisian
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What are the uses of price elasticity of demand to the business firms and to the government?
Elasticity measures help the sales manager in fixing the price of his product. The concept is also important to the economic planners of the country. In trying to fix the production target for various goods in a plan, a planner must estimate the likely demand for goods at the end of the plan. This erequires the use of income elasticity concepts.The price elasticity of demand as well as cross elasticity would determine the substitution between goods and hence useful in fixing the output mix in a production period. The concept is also useful to the policy makers of the government, in particular in determining taxation policy, minimum wages policy, stabilization programmer for agriculture, and price policies for various other goods (where administered prices are used).The managers are concerned with empirical demand estimates because they provide summary information about the direction and proportion of change in demand, as a result of a given change in its explanatory variables. From the standpoint of control and management of external factors, such empirical estimates and their interpretations are therefore, very relevant.
What is price skimming?
Price skimming is pricing policy by the producer to sell his product with initially for high price and then at decreasing rate over the time.
How does the government fiscal policy affect the economy?
When inflation increase
What do you mean by pricing policy?
A detailed study of the market structure gives us information about the way in which prices are determined under different market conditions. However, in reality, a firm adopts different policies and methods to fix the price of its products. Pricing policy refers to the policy of setting the price of the product or products and services by the management after taking into account of various internal and external factors, forces and its own business objectives. Pricing Policy basically depends on price theory that is the corner stone of economic theory. Pricing is considered as one of the basic and central problems of economic theory in a modern economy. Fixing prices are the most important aspect of managerial decision making because market price charged by the company affects the present and future production plans, pattern of distribution, nature of marketing etc.
What are the factors affecting business policy?
There are many different factors that affect business policy. These different factors range from shareholders to the dividend policy of a certain business.
How does elasticity a company's pricing policy?
If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues.
If you receive a ticket in Georgia for 83 mph in a 70 mph zone will this affect your insurance rates?
It might if your carrier finds out about it. Most insurance companys (after the inital policy has been written), will rule 'clues' or driving records periodically on their insureds. If that happens and your ticket is found, it might affect your rates, and it might not, it will depend on your companys underwriting rules, if you are worried about it call your companys policy services dept and ask them.
Which pricing policy adopted by Nike in south African country?
Which pricing policy adopted by nike in south African country?"
What is the pricing policy on cakes?
about $6.00
WHAT are Uses of PRICE ELASTICITY OF DEMAND?
There are several uses of Price Elasticity of Demand that is why firms gather information about the Price Elasticity of Demand of its products. A firm will know much more about its internal operations and product costs than it will about its external environment. Therefore, gathering data on how consumers respond to changes in price can help reduce risk and uncertainly. More specifically, knowledge of Price Elasticity of Demand can help the firm forecast its sales and set its price.Sales forecasting: The firm can forecast the impact of a change in price on its sales volume, and sales revenue (total revenue, TR). For example, if Price Elasticity of Demand for a product is (-) 2, a 10% reduction in price (say, from $10 to $9) will lead to a 20% increase in sales (say from 1000 to 1200). In this case, revenue will rise from $10,000 to $10,800.Pricing policy: Knowing Price Elasticity of Demand helps the firm decide whether to raise or lower price, or whether to price discriminate. Price discrimination is a policy of charging consumers different prices for the same product. If demand is elastic, revenue is gained by reducing price, but if demand is inelastic, revenue is gained by raising price.Non-pricing policy: When Price Elasticity of Demand is highly elastic, the firm can use advertising and other promotional techniques to reduce elasticity.
What is Heineken pricing strategy?
Globally, Heineken utilizes the premium pricing policy. This is effective as the Heineken brand is unique to that of competitors.
How do you answer what is good?
if a customer complanied about an assocaiate in your store pricing or a policy what would you do
How do you answer 'What is good customer?
if a customer complanied about an assocaiate in your store pricing or a policy what would you do
What are the benefits of health insurance policy?
See the link on Pricing & Benefits for Calfornia
What companys offer car breakdown cover?
AAA is one of the most popular companys that offer coverage for your car if it breaks down, but many insurance companies also may include coverage in your insurance policy.
When studying how some event or policy affects a market elasticity provides information on the?
maginitude of the effect on the market.
What are the uses of price elasticity of demand to the business firms and to the government?
Elasticity measures help the sales manager in fixing the price of his product. The concept is also important to the economic planners of the country. In trying to fix the production target for various goods in a plan, a planner must estimate the likely demand for goods at the end of the plan. This erequires the use of income elasticity concepts.The price elasticity of demand as well as cross elasticity would determine the substitution between goods and hence useful in fixing the output mix in a production period. The concept is also useful to the policy makers of the government, in particular in determining taxation policy, minimum wages policy, stabilization programmer for agriculture, and price policies for various other goods (where administered prices are used).The managers are concerned with empirical demand estimates because they provide summary information about the direction and proportion of change in demand, as a result of a given change in its explanatory variables. From the standpoint of control and management of external factors, such empirical estimates and their interpretations are therefore, very relevant.
