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Why it is important for a business to know the price elasticity of demand for its product?
Wiki User
∙ 13y ago
1) Firms know the perception of their product in the eyes of consumers; customer loyalty level. (Devise appropriate marketing strategies to improve perception of pdt)
2) Pricing strategy (an elastic demand curve will require biz to lower price to earn a higher Total revenue)
3) Customer's response to a promotional campaign. (a pdt that has an elastic curve will be more responsive)
4) Competitor's position. If lowering price is able to raise demand by more than a proportionate amount, this shows competitor's demand curve is relatively elastic.
5) anticipate patterns for new products / extensions that are similar with the current one.
Wiki User
∙ 13y ago
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Importance of elasticity of demand?
It is important because if a company doesn't understand their product's elasticity of demand, they are screwed!
Importance of cross elasticity of demand?
Cross elasticity of demand is sometimes written as XED. In business the cross elasticity of demand is important because it will help determine whether or not it is a good move to increase or decrease prices or to substitute one product for another for the purpose of revenue.
Why is determining demand elasticity important in economics?
Determining demand elasticity helps managers know how to schedule their goods. When they know their product isn't in demand, they can purchase another product instead.
Explain why elasticity of demand is such an important concept to marketers who sell a commodity product?
Elasticity of demand is important to marketers because it helps them know the optimal price for the product. When a product is priced too high, the consumers may opt for a competitor's product.
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.
Importance of elasticity of demand?
It is important because if a company doesn't understand their product's elasticity of demand, they are screwed!
Importance of cross elasticity of demand?
Cross elasticity of demand is sometimes written as XED. In business the cross elasticity of demand is important because it will help determine whether or not it is a good move to increase or decrease prices or to substitute one product for another for the purpose of revenue.
Why is determining demand elasticity important in economics?
Determining demand elasticity helps managers know how to schedule their goods. When they know their product isn't in demand, they can purchase another product instead.
Explain why elasticity of demand is such an important concept to marketers who sell a commodity product?
Elasticity of demand is important to marketers because it helps them know the optimal price for the product. When a product is priced too high, the consumers may opt for a competitor's product.
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.
What is environmental elasticity?
Environmental elasticity is the responsiveness of demand for a product to a change in the environmental impact of the product.
What is role of price elasticity of demand in business decision?
role of price elasticity of demand in managerial decisions
Conclusion of price elasticity of demand?
The conclusion of the price of elasticity of demand is the effect of price change based on the revenue it receives. It is based off the demand of the product and the price of the product.
What is cross price elasticity demand?
Cross price elasticity of demand measures the responsivenss of demand for a product to a change in the price of another good.
What is the difference between elasticity and inelasticity of demand?
Inelasticity is a good that you will buy nomatter the price change. Elasticity is when the price of a product increases demand for the product will decrease.
What is importance of elasticity?
Cross elasticity of demand is the responsiveness of demand for one product to a change in the price of another product. It will help predicts how prices of products will act.
What is importance of cross elasticity?
Cross elasticity of demand is the responsiveness of demand for one product to a change in the price of another product. It will help predicts how prices of products will act.
