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
What is the role of outdoor advertising in increasing awareness and developing perception towards the organizations? Appropriate data             In order to solve this rese

What terms are used to define the way a variable moves when economic activityis rising or falling? What terms are used to describe the timing cyclical changes ineconomic variables?

example of selection process

Minimize Error Variance: A third group of factors influencing the dependent variable are known as random variables because they are temporary factors which vary fro

Comment on the nature of management? Is management a science or an art? What are the different levels and describe the role of the people at each level of management?

.What distinguishes quality initiatives like ISO 9000 and the Baldridge National Quality Program from Total Quality Management (TQM) and similar managerial commitments? • There is

discuss that technological breakthrough has brought a radical changes in hrm.

comparison of online recruitment and traditional methods

i need some suggestion about Frederick Winslow Taylor