Price elasticity of supply, Management Theories

You just opened a flower shop and are trying to understand pricing issues. You were told that elasticities are very vital in determining prices and what products to provide, so you decide to investigate this concept.

You call your friend, an economics professor, and ask, "What is the price elasticity of demand? What determines it? What is elastic and inelastic demand?"

To really appreciate it, compute the following price elasticity's of demand:

  • The price of a laptop enhances by 20% and there is a 40% drop in the quantity demanded.
  • The price of a pack of cigarettes enhances by 10% and there is a 5% drop in the quantity demanded.
  • The price of water enhances by 15% but there is no drop in the quantity demanded

 

  • Why is elasticity an significant concept for a business? What if national income went up? How would that affect elasticity?
  • What is the price elasticity of supply? What verifies it?
  • Compute the following price elasticities of supply:
    • The price of a hotel room enhances by 20%, and the quantity supplied enhances by 10%.
    • The price of health care goes up by 50% , and the quantity supplied enhances by an equal amount.
    • The price of a book enhances by 10%, and the quantity supplied increases 20%.
    • In the above examples, which is more elastic and which is the least elastic? Why?
  • What kind of supply and demand elasticities would the following goods have, and why?
    • Bridge tolls
    • Beachfront properties
    • Gourmet coffee

 

Posted Date: 3/22/2013 3:50:22 AM | Location : United States







Related Discussions:- Price elasticity of supply, Assignment Help, Ask Question on Price elasticity of supply, Get Answer, Expert's Help, Price elasticity of supply Discussions

Write discussion on Price elasticity of supply
Your posts are moderated
Related Questions
This case has been framed in order to test the skills in evaluating a credit request and reaching a correct decision. Perluence International is large manufacturer of petroleum and

#question coca cola company assighnment..

inwhich the following situation would you like to use statices a)buying a house b)purchasing medicine prescribed by a doctor c)investing funds in several option

how management information system help business to grow?

A decision tree, the node, o , represents an "event". TRUE          FALSE


CIRCULATION WORK Circulation work is the primary task of most modem service libraries. A collection of documents, thoughtfully and painstakingly built up as a library, is mea

An organization may be defined as a group of people working in a group to achieve a common goal. The employees of the organization form different teams and work accordingly to comp

Hi, I wondered if you help with UK students?

Control or Eliminate Extraneous Variance: It means the control or elimination of the impact of other independent variables which are likely to influence the dependent