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Why is the price elasticity of demand for products at a 24 hour convenience store likely to be lower at 2 a.m than 2 p.m?
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What is the Significance of cross elasticity in business decision making?
The degree of change in the demand for one product as a response to a change in the price of a different product. For example, an increase in the price of petroleum is likely to have a negative impact on the demand for gas-guzzling vehicles and a positive impact on the demand for fuel-efficient vehicles. The cross elasticity for substitutes is generally positive, in that a price increase for one product will result in an increase in demand for a substitute.
Why are both the price elasticity of demand and the price elasticity of supply likely to be greater in the long run?
In the long run, manufacturers and producers can respond to consumer demand by analyzing trends that develop over time. Short-term, this is less practical because adjustments often cannot be made quickly enough to accommodate changes.
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.
Can we use the concept of price elasticity to identify a brand's competitors?
Yes, you can. When the cross-price elasticity between two goods is positive, they are more likely substitutes in consumption; when it is negative, they are more likely complements. A cross-price elasticity of 0 implies no correlation.
What in your opinion will be an appropriate price policy if the demand reaches its saturation point and the substitute products are likely to enter the market?
what kind of policies can be implemented
What is the Significance of cross elasticity in business decision making?
The degree of change in the demand for one product as a response to a change in the price of a different product. For example, an increase in the price of petroleum is likely to have a negative impact on the demand for gas-guzzling vehicles and a positive impact on the demand for fuel-efficient vehicles. The cross elasticity for substitutes is generally positive, in that a price increase for one product will result in an increase in demand for a substitute.
Why are both the price elasticity of demand and the price elasticity of supply likely to be greater in the long run?
In the long run, manufacturers and producers can respond to consumer demand by analyzing trends that develop over time. Short-term, this is less practical because adjustments often cannot be made quickly enough to accommodate changes.
What has the larger elasticity demand sports illustrated or a magazine?
Sports Illustrated likely has a larger elasticity of demand compared to a regular magazine because sports content tends to be more niche and specialized. This means that consumers may be more sensitive to price changes for Sports Illustrated compared to a generic magazine.
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 types of products can one find at a convenience store?
Convenience stores carry any items that would be considered convenient. From toilet paper to chewing gum it can most likely be found there. Most popular items at convenience stores are lunch meats, cigarettes, and beverages.
Can we use the concept of price elasticity to identify a brand's competitors?
Yes, you can. When the cross-price elasticity between two goods is positive, they are more likely substitutes in consumption; when it is negative, they are more likely complements. A cross-price elasticity of 0 implies no correlation.
What in your opinion will be an appropriate price policy if the demand reaches its saturation point and the substitute products are likely to enter the market?
what kind of policies can be implemented
Are pharmaceutical products elastic?
They are likely to be inelastic meaning the demand for the products will not change in relation to price. This is because if consumers require medication then it is unlikely they will refuse to buy it based on a slight price increase
What are the determinants of elasticity of demand?
Price Elasticity of Demand [PED] is determined byThe number and 'closeness' of substitutes: A unique and desirable product is likely to exhibit an inelastic demand with respect to price.The degree of necessity of the good: A necessity like bread will be demanded inelastically with respect to price.Whether the good is habit forming: Consumers are also relatively insensitive to changes in the price of habitually demanded products.The proportion of consumer income which is spent on the good: The PED for a daily newspaper is likely to be much lower than that for a new car!Whether consumers are loyal to the brand: Brand loyalty reduces sensitivity to price changes and reduces PED.Life cycle of product: PED will vary according to where the product is in its life cycle. When new products are launched, there are often very few competitors and PED is relatively inelastic. As other firms launch similar products, the wider choice increases PED. Finally, as a product begins to decline in its lifecycle, consumers can become very responsive to price, hence discounting is extremely common.
Example of elasticity?
[This is a requested cleanup of a flagged group of answers]There are two uses of the term elasticity. The first is its use in physics.Elasticity is the ability of an object to take its original shape after it has been deformed.There are 4 mechanical deformations that can produce elasticity.Elongation ("stretching") - a classic example is a rubber band, or a spring that pulls, or the "elastic" bands in clothing. It could also be 2-dimensional like jumping on the surface of a trampoline.Compression ("squeezing") - a spring that pusheslike the coil springs under a vehicle, or a ball which temporarily flattens when hit by a bat or golf club. Another example is when you pinch the skin on the back of your hand, let go, and watch the skin pull itself back into place.Flexion ("Bending") - a diving board, leaf springs under a vehicle, a bow being used to shoot an arrow.Torsion ("Twisting") - one type of spring used under a vehicle is the "torsion bar", so when the car hits a bump it twists a steel bar which untwists after the bump, absorbing the energy and smoothing the ride.The second use of elasticity is in economics, where it has a number of meanings which are mostly highly technical.In is simplest forms, market elasticity is the ratio of the percent change in one variable to the percent change in another variable. It is a tool for quantifying a specific result of taking a specific financial action.Probably the simplest form to understand is the PED, price elasticity of demand.[ PED = the % change in demand / the % change in price ]. In an elastic market, a small drop in price results in a large change in quantity demanded. In an inelastic market, changing the price doesn't change the demand at all, so you might as well carefully raise your price until you see some elasticity develop.A related easy-to-understand form is the IED or YED, income elasticity of demand.[ IED = the % change in demand / the % change in income ]. Most products tend to have a positive elasticity; as their income goes up people tend to buy (demand) more and as their income goes down they tend to buy less. "Cheap" products tend to have negative elasticity; as income goes up people tend to buy fewer "cheap" products, but if their income goes down they are likely to buy more "cheap" inferior products. A highly addictive product might have an inelastic IED; people will continue to buy it regardless of their income, and if their income goes down they'll give up something else first.
What is the definition of elasticity of demand?
Demand elasticities refer to the response among consumers of a good to a change in the good's price. "Elastic" demand means that a small increase in price will lead to a relatively large decrease in demand (or vice versa). Goods with elastic demand curves tend to have many close substitutes. For example, demand for "tangerines" is more elastic than demand for "citrus fruits," because if the price of tangerines rises, you can switch to oranges etc. Likewise, the demand for "citrus fruits" is more elastic than the demand for "fruit," because if all citrus fruits rise in price, you can switch to apples, bananas, etc, but if the price of all fruits goes up, you're not likely to buy a leg of lamb instead. Items that are highly "inelastic" may be things that represent small portions of a consumer's budget. If salt goes from $.69 to $3, that is a huge increase in price. But will you stop buying salt? Highly unlikely, because it still represents a small portion of your income, and there are few if any less expensive substitutes. You might not even notice.
Discuss the factors that are likely to influence the demand for desktop computers in Ghana?
Discuss the factors that are likely to influence the demand for desktop computers in GHANA?
