Yes, in fact, the price elasticity of a good is very useful when deciding on which goods to produce. The more inelastic the good, the more power the producer has in setting the price level of that good.
Take, for example, the pharmaceutical industry. Medicine is an inelastic good because no matter what the price is, people will still need the medicine that they purchase. So if a pharmaceutical company has the only product of its kind on the market they have an almost monopolistic control over that particular market and they are able to set almost any price level they wish. In this case, these producers are price setters.
If the price of a good is elastic, like milk for example, producers have less control over the market. If the price of milk were to increase, then consumers would substitute away from milk to some other commodity. Therefore, producers in the milk industries are price takers, because they take whatever price is already on the market, and they sell their products for that price.
So, for an aspiring entrepreneur, knowing what kind of product is elastic and what kind of product is inelastic is very useful. If they really want to make a good deal of money, it would be wise to choose a product that is relatively inelastic. This was a change in price will not greatly affect the quantity of their good that is sold.
it is what elasticity of demand
How can government benefit from the elasticity concepts? Analyse the various economic policies which will benefit from the concept.
Elasticity helps to find optimal production quantities and thus optimal profits.
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.
elasticity
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how government use the elasticity concept to genrate revenue
it is what elasticity of demand
Elasticity helps to find optimal production quantities and thus optimal profits.
How can government benefit from the elasticity concepts? Analyse the various economic policies which will benefit from the concept.
with example explain the concept of of elasticity of supply and interpretating the result graphical and descuse the relationship between price elasticity and suppliers total revenue
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.
elasticity
When you have less income you tend to consume less.
The concept of elasticity is a physical property because force can mutate a physical item and then when that force is removed and elastic object returns to its original form.æ Using elasticity to explain non physical phenonmena is a misnomer.
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.
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.