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Why is the concept of price elasticity of demand potentially very useful for a business?
Wiki User
∙ 6y ago
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.
Wiki User
∙ 14y ago
Wiki User
∙ 13y agoimportance of elasticities in managerial decision making
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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.
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 the concept of price elasticity of demand potentially very uesful to a businss?
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.
What is the concept of 'elasticity of demand' its various forms and its usefulness for business decisionmaking?
Am a student and i need more insight to do my assignment. Thank you.
What is role of price elasticity of demand in business decision?
role of price elasticity of demand in managerial decisions
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.
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 the concept of price elasticity of demand potentially very uesful to a businss?
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.
What is the concept of 'elasticity of demand' its various forms and its usefulness for business decisionmaking?
Am a student and i need more insight to do my assignment. Thank you.
What is role of price elasticity of demand in business decision?
role of price elasticity of demand in managerial decisions
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.
What are the 4 characteristics of business demand?
the 4 characteristics of business demand are derived demand, fluctuating demand, stimulating demand and finally demand elasticity!
How useful are the concept of elasticity in running a business successfully?
By the concept of Elasticity in the context of running a business.. the best view is taken in the elasticity of demand. Goods and Services are either highly elastic or low elastic. A good with highly elastic demand will have higher changes to quantities demanded for relatively small changes in price. Whereas something with a lower elastic demand, will not have major changes in demand for a small change in price. So for example, the price of a diamond is highly elastic, a small change in say a fall of diamond prices will have a huge impact, whereas something like salt, an increase or decrease in price will not affect the amount demanded. Thats how useful the concept of elasticity is in running a business successfully.
What role does price elasticity demand play in decision making by business firms?
price elasticity
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.
How the elasticity of demand affect managerial decisions?
Elasticity of demand affects managerial decisions because the demand of a product changes with the wrong business decision. Managers must be careful about what they choose to do with their products.
Explain the concept of income elasticity of demand and how it is calculated?
When you have less income you tend to consume less.
