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What would result in a higher absolute value of the price elasticity of demand for a product?
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What is the definition of price elasticity on demand?
the higher the price,the shorter the quantity
How does price elasticity of demand affect a firm's pricing decisions?
The price elasticity of demand affects a firm's pricing decisions by determining the optimal profit margin. Price elasticity of demand describes the rate of change of demand in response to a change in price. The higher it is, the higher demand changes in respond to price; lower means very little change. For a good with low elasticity, it is easier to profit off marking-up the price because demand falls little in response to a price increase. For a high elasticity, prices should approach equilibrium because straying from equilibrium results in a higher change in demand than in price.
Point elasticity of supply?
The point elasticity of supply is a measure of the rate of response of quantity demand due to a price change. The higher the elasticity, the more sensitive the sellers are to these changes.
How does supply and demand affect the price of a product?
the higher the demand the higher the price.the lower the demand the lower the price.
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 is the definition of price elasticity on demand?
the higher the price,the shorter the quantity
Does soap have a higher elasticity of demand than ivory soap?
yes
How does price elasticity of demand affect a firm's pricing decisions?
The price elasticity of demand affects a firm's pricing decisions by determining the optimal profit margin. Price elasticity of demand describes the rate of change of demand in response to a change in price. The higher it is, the higher demand changes in respond to price; lower means very little change. For a good with low elasticity, it is easier to profit off marking-up the price because demand falls little in response to a price increase. For a high elasticity, prices should approach equilibrium because straying from equilibrium results in a higher change in demand than in price.
Point elasticity of supply?
The point elasticity of supply is a measure of the rate of response of quantity demand due to a price change. The higher the elasticity, the more sensitive the sellers are to these changes.
How does supply and demand affect the price of a product?
the higher the demand the higher the price.the lower the demand the lower the price.
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 is Ramsay pricing?
it assigns costs based on the price elasticity of demand. het higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
Which influence on spending deals with the motivation to purchase a product?
the price of the product and the willingness of the consumer to purchase the product impact the demand of the product by the consumer. lower the price, higher will be the demand and higher is the motivation level to buy the good.
What is the advantage of product differentiation?
A company that excels at product differentiation can normally demand a higher price for a product because of its perceived higher quality.
How does the incidence of a tax use the price elasticity of supply and demand?
If the demand is perfectly elastic in prices (that is, demand falls to zero if the price for consumers is raised even the slightest bit), then the entire tax incidence falls on the producer since the producer would rather face the entire tax burden than lose all his consumers. And if the demand is perfectly inelastic (doesn't change with change in commodity price) then the entire burden falls on the consumers. So higher the price elasticity of demand, higher would be the share of taxes borne by the producer. And higher the price elasticity of supply, lower the share borne by the producer, by similar logic.
What is the advantage of differential?
A company that excels at product differentiation can normally demand a higher price for a product because of its perceived higher quality.
Which effect does scarcity have on the price of the product if the demand stays the same?
The scarcer the product, the higher the price.
