StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Economic And Management - Essay Example

Cite this document
Summary
This paper intends to define the concept of elasticity and the concept of price elasticity of demand. At first deals with explaining what Price Elasticity of demand (PED) is and what factors determines PED of a good. Then after giving this basic knowledge it relates the scenario with the concept of PED and total revenue.
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Economic And Management
Read Text Preview

Extract of sample "Economic And Management"

Download file to see previous pages

Elasticity is an easy way of enumerating cause and effect correlations. It is described normally as a mathematical measure of the responsiveness of one economic variable (the dependant variable) following a change in another influencing variable (the independent variable), ceteris paribus. Now we shall understand what Price Elasticity of demand (PED) is, it is the measure of responsiveness of demand for a good following an alteration in its own price. If demand is elastic, then a little transform in price will consequence in a comparatively big change in amount demanded.

However, if price increases by too much and quantity demanded descends vaguely, then demand would be price inelastic. (Hubbard and O'Brien, 2008) If co-efficient of PED = 0, it means that demand is perfectly inelastic. This means that any change in price whether increase or decrease does change the quantity demanded. Hence making its demand curve a vertical line in price(x axis) to quantity(y axis) space. If co-efficient of PED is between 0 and 1, when we get values of PED between 0 and 1 than we say PED to be inelastic this means that percentage change in demand is lesser than percentage change in price.

Producers know that the change in demand will be proportionately smaller than the percentage change in price. . Producers know that the change in demand will be proportionately smaller than the percentage change in price. Therefore Demand curve will be a very steep slanting line in price(x axis) to quantity(y axis) space.If co-efficient of PED = 1, when a percentage change in price changes the percentage of quantity demanded by the same proportion the PED is said to be unitary elastic. For example a 10% rise in the price of apples causes a 10% fall in its quantity demanded.

If co-efficient of PED > 1, when the value of PED exceeds 1 then demand is said to be elastic, which means that a % change in price causes the quantity demanded to change by more than proportionate. For example a 10% rise in prices of apples cause its quantity demanded to drop by 15%. (Lipsey & Chrystal, 2007; Sloman, 2006)Factors Determining Price Elasticity of Demand:Now let us take a look at the key factors that determines the PED for goods and services. They are as follows:The range of near substitutes for a product / attractiveness of the good- the more the number of substitutes of a good the more elastic would be its demand because consumers can easily turn to other alternative good.

For example coke's perfect substitute is Pepsi, and therefore if coke raises its price people will turn to Pepsi instead. And the more the product is unique the more inelastic would be its demand. (Tucker, 1999; Samuelson & Nordhaus, 2001)The fee of toggling amid different products - there may be noteworthy dealings expenses caught up in changing among dissimilar goods and services. For example, mobile phone service suppliers may incorporate penalty clauses in agreements or persevere on 12-month

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Economic And Management Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Economic And Management Essay Example | Topics and Well Written Essays - 1250 words. Retrieved from https://studentshare.org/miscellaneous/1505380-economic-and-management
(Economic And Management Essay Example | Topics and Well Written Essays - 1250 Words)
Economic And Management Essay Example | Topics and Well Written Essays - 1250 Words. https://studentshare.org/miscellaneous/1505380-economic-and-management.
“Economic And Management Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/miscellaneous/1505380-economic-and-management.
  • Cited: 0 times

CHECK THESE SAMPLES OF Economic And Management

The Export of Manufactured Goods to Generate Economic Growth

A lot of research work has been devoted to study the concepts and complexities determining economic growth.... However, in recent times, focus… f the economists has shifted to vigorously study the complexities of long-term economic growth or sustainable economic growth, an area that is now called endogenous growth theory.... Economists believe that economic growth is a complex process and it According to the export-led growth hypothesis (ELGH), it is not only through increased application of labour and capital that overall growth of the national economies is possible but this can also be done through raising the levels of exports....
4 Pages (1000 words) Essay

Summary and Analysis of Japanese, Korean and Chinese Business Approaches

It contains lectures on the Japanese business system; Japanese management style; internationalization strategies and Japanese management; Korean management system and business strategy and others.... hellip; Lifetime employment, seniority wages, and no lay-offs during the recession are fairly regarded as the main and most advantageous features of the Japanese management style.... apanese enterprises exhibit and rely on unique management styles....
6 Pages (1500 words) Assignment

Facility Management: Planning for the NCAA Final Four

hellip; This paper will provide information on how the event can be organized successfully in terms of planning for its management, risk management, crowd control procedures, medical emergency, and evacuation.... This research will begin with the statement that proper management of occasions is crucial to ensure successful outcomes, guest satisfaction, promote the organizer's image, and generally raise expectations for even more appealing outcome in similar events in the future....
8 Pages (2000 words) Essay

To demonstrate how the field of 'globalisation studies'has moved on

he author delves into the principle of neoliberalism as the leading doctrine of political, economic, and management practices.... Moreover,… The author, David Harvey, narrates the political-economic story of neoliberization and its spread to the global stage.... The author, David Harvey, narrates the political-economic story of neoliberization and its spread to the global stage....
1 Pages (250 words) Annotated Bibliography

Specific Set of Skills and Competencies Required for Effective Management of Hotels

The paper "Specific Set of Skills and Competencies Required for Effective management of Hotels" proves that Communication, interpersonal skills, total quality management, leadership, and strategic skills are required in technical, HR and leadership management of the hospitality industry....
8 Pages (2000 words) Assignment

IASB Conceptual Framework 2010 Version on Exclusion of Prudence

A Conceptual Framework is a model that governs the preparation and presentation of financial statements.... The financial statements include the… The model is usually developed by the IASB.... In the revision, IASB replaced the concept of Prudence by Neutrality (Kampanje, 2013). According to IASB Discussion Paper (2013), Neutrality is reflected as a faithful Therefore, prudence is not identified as being of a separate qualitative characteristic....
7 Pages (1750 words) Essay

Crime Prevention Policies in Organizations

Success depends on sound planning and management to attain the aims.... hellip; This new way of functioning, led by economic ideologies and rational strategies has contributed to the making of the public sector and further assimilation of both public and private business for economic growth and capitalism has speedily turned into a positive discussion on government policy and practice (McLaughlin and Murji 1995))....
8 Pages (2000 words) Report

Management and Marketing in Small and Medium Enterprise

Bolton 1971, cited in Bannock (2005), he identified three characteristics in its economic definitions of a small firm:A small market share, that is not large enough to influence national price or qualities (even though a village shop may be the only one, its prices cannot get too far out of line from those of major national retailers in the nearest town, even though people will pay something for local convenience) Managed in a personalized way: the owner actively participates in all aspects of the business unlike in a large firm where the shareholders and management are usually almost entirely separate....
9 Pages (2250 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us