CPI
Price elasticity of demand refers to the degree to which demand changes given a change in price. Consider an example, if we sell our toothbrushes for $2, and demand is 100. If we increase the price of toothbrushes to $2.10, how much does that affect demand? That is price elasticity. There are basically two types of elasticity -- elastic demand and inelastic demand (NetMBA, 2010).

Elastic demand is a situation where the demand changes at a greater rate than the price changes. If the scenario above, the price change is 5%. If the product's demand changes from 100 to 90 based on this increase, the price elasticity of demand will be 2, because the demand changed 10%, and the price changed 5%. The other major type of elasticity is price inelasticity of demand. Say the demand only fell to 98. Thus, the demand fell 2%, when the price increased 5%. This…...

mla

Works Cited:

NetMBA. (2010). Price elasticity of demand. NetMBA. Retrieved May 2, 2012 from  http://www.netmba.com/econ/micro/demand/elasticity/price/ 

Pietersz, G. (2012). Exchange rate risk. MoneyTerms.co.uk. Retrieved May 2, 2012 from  http://moneyterms.co.uk/exchange-rate-risk/

Economists Have to Say About Gasoline Price Elasticity
In contemporary society, the price of gasoline often appears to change in a fickle manner and most often seems unrelated to any real world global events as might be expected. Charging higher taxes for gasoline is considered a dubious strategy by many people since not everyone affected by the tax increase can elect to stop buying gasoline or buy less fuel for their cars in response to the tax change. Moreover, it is not feasible for everyone who currently drives to work to move closer to their place of employment, schedule carpooling, or arrange to telecommute. For a fairly substantial demographic, gasoline cannot be considered a normal good, as demand for it will not increase if income increases -- unless the increased incomes is truly substantive -- as they quite simply need and purchase fuel in order to get to work and…...

mla

References

Espey, M. (1996). Explaining the variation in elasticity estimates of gasoline demand in the United States: A meta-analysis. The Energy Journal, 17(3), 49-60. Retrieved from Stable URL: http://www.jstor.org/stable/41322693

Goodwin, P., Dargay, J., & Hanly, M. (1992). Review of income and price elasticities in the demand for road traffic. Transport Reviews, 24(3). Retrieved from  http://www.tandfonline.com/loi/ttrv20 

Moffatt, M. (2015). What's the Price Elasticity of Demand for Gasoline? (Hint: It isn't zero). What do the studies say? Economics. About.com Retrieved from  http://economics.about.com/od/priceelasticityofdemand/a/gasoline_elast.htm 

Rittenberg, (2009). Principles of Microeconomics. Washington, D.C.: Flat World Knowledge, pp. 58-62.

Bury Price Elsticity
Will Bury's e-publishing invention tht cn produce both digitl text nd understndble digitlly-red text quickly from published books hs the potentil to completely disrupt digitl publishing, digitl recording nd wide spectrum of other trining-relted industries. His erly efforts t selling the recordings nd downlodble book files online hve been disppointing, showing n pprent lck of price elsticity in the mrket. One of the fundmentl shortcomings of his pricing strtegies is their lck of gility s it reltes to vlue-bsed pricing strtegy. Will need to relize tht the content of the books nd their reputtion for scrcity vs. ubiquity hs direct effect on their price elsticity curves (Xu, 2007). Will needs to lso do significntly greter level of experimenttion with pricing to determine how the customers he is ttrcting to his website view the recordings from vlue, substitution pricing theory, nd scrcity vs.…...

mla

a) How will you increase revenue?

It is counterintuitive to consider dropping prices to drive up revenues, which is what the majority of ebook sellers do in an attempt to gain greater market share (Xu, 2007). The faulty assumption that all markets, even ebooks and digital recordings have unitary to high levels of elasticity are erroneous, as digital good demand curves are more based on scarcity of the title in a given digital format, demand for the book as a classic or best-selling new volume, and the perceived value of the book's content to the reader (Xu, 2007). Will Bury needs to take these factors into account and not assume a highly elasticity demand curve, then proceed to rapidly reduce prices over time, as this will just drain gross contribution margin and over time force the venture to close.

To increase revenues, Will Bury needs to take a more methodical approach to managing the e-books and digital recordings. First, he needs to create categories of each, keeping in mind that the taxonomy he creates for the entire series of products will also communicate market positioning and imply value levels (Danaher, 2010). Second, he needs to being using more dynamic pricing to begin collecting data on the demand curves (Clay, Smith, Wolff, 2006).

Bury Price Elasticity Service
Business Proposal for Will Bury Price Elasticity, Incremental Costs

Digitally recorded books (e-books) and digital content face several significant challenges from a price elasticity and market pricing perspective. The barriers to entry from digitizing content alone are low (Starkweather, 2004), with differentiation existing at the marketing, packaging, delivery technology and pricing strategy level. The intent of this proposal is to define how Will Bury will be able to increase revenues, determine the profit-maximizing quantity of music, use the concepts of marginal cost and marginal revenue to maximize profit, and also define a profitable mix of pricing and nonpricing strategies. Barriers to entry, product differentiation and cost reduction strategies are also profiled in this proposal.

evenue Generation

Of the many options for defining a price for the digital goods including music and books, the two most prevalent are fixed-fee licensing (FFP) and per-copy licensing (PCP) (Starkweather, 2004). Fixed fee pricing…...

mla

References

Eichenbaum, M., Jaimovich, N., & Rebelo, S.. (2011). Reference Prices, Costs, and Nominal Rigidities. The American Economic Review, 101(1), 234.

McConnell, C.R., Brue, S.L., & Flynn, S.M. (2009). Economics: Principles, problems, and policies (18th ed.). Boston, MA: McGraw-Hill/Irwin.

Martin Peers. (2011, April 7). Netflix Shows Content Is King, At Least for a Day. Wall Street Journal (Eastern Edition), p. C.12.

Starkweather, Collin (2004). Network externalities, network effects and the digital economy. Ph.D. dissertation, University of Colorado at Boulder, United States -- Colorado.

Second, it's possible to use price elasticity as an indicator of a product or services' level of necessity or luxury, the
proportion of income required to purchase the item, and the time period
covered for the purchase all indicate highly elastic products. Inelastic
products often have many substitutes, are more commodity-like, and are sold
through bundling, convenience offers and drastic discounting.
Price elasticity then can be used to define competitors not only by
designating which products are potential substitutes, but also by the
percentage of a persons' income needed to complete the purchase and the
time horizon of the purchase. Most important of all, pricing elasticity
indicates which strategies competitors will take at the exclusion of price.
This can be insightful to see how a competitor in an inelastic market will
rely on promotional strategies, product bundling, new distribution
arrangements, and also even entirely next generation products to compete.
Pricing elasticity then can indicate not only which the most dominant
competitors are, but also…...

mla

Reference

USA Today (2004) - Wal-Mart cutting prices on more than 100 toys.

Accessed from the Internet on August 2, 2007 from location:

 

toysx.htmhttp://www.usatoday.com/money/industries/retail/2006-10-18-wal-mart -

Price Elasticity of Demand
For a firm looking to boost its profits, it must consider how a change in price might affect the total profits. The most important concept to this analysis is price elasticity of demand. The underlying principle of price elasticity of demand is that a change in the price of a good will result in a change in demand. The degree to which this occurs is the rate of elasticity. Price elasticity of demand is determined by dividing the change in demand by the change in price. Alternatively, a variety of price points can be graphed and the slope of the demand curve can be determined (NetMBA, 2010).

In either case, a company that is seeking to maximize its revenues will need to determine the point at which it has achieved the optimal price and demand. This is the point at which the price multiplied by the demand is…...

mla

Works Cited:

NetMBA.com (2010). Price elasticity of demand. NetMBA. Retrieved November 15, 2010 from  http://www.netmba.com/econ/micro/demand/elasticity/price/ 

AP. (2007). Coffee clash: McDonald's versus Starbucks. MSNBC. Retrieved November 15, 2010 from  http://www.msnbc.msn.com/id/21837962/ns/business-consumer_news 

Jargon, J. (2009). As profit cools, Starbucks plans price campaign. Wall Street Journal. Retrieved November 15, 2010 from  http://online.wsj.com/article/SB124103701018769993.html

The exclusivity of these higher-end products and their cost structures also are deliberately now being created to ensure barriers to entry from mass merchandisers. The threat of a mass merchandiser dominating the supply chain and driving down costs to sell on brand equity alone continues to force marketers of key brands in this industry to concentrate on defensible differentiation. As a result of all these strategies and the inherent structure of this industry the price elasticity of high-end cotton apparel continues to be protected from becoming too price-inelastic over time.
Total evenue Implications

Clearly the revenue implications of managing products with low price elasticity as toys are require an inordinate level of supply chain, distribution and logistics efficiency as the per-unit margins are already under severe pressure. For products that have higher levels of price elasticity there is the benefit of typically greater gross margins yet the constraint of longer sales…...

mla

References

Rob Docters, Christine Durman, Tracy Korman, Bert Schefers. 2008. The neglected demand curve: how to build one and how to benefit. The Journal of Business Strategy 29, no. 5 (September 1): 19-25.   (Accessed December 21, 2008).http://www.proquest.com 

Fadiga, Mohamadou Lamine "United States consumer demand for cotton apparel: Implications for the apparel industry." Ph.D. diss., Texas Tech University (2003). In ABI/INFORM Global [database online]; available at

Price Elasticity Airlines
The piece "Airlines try cutting business fares, find they don't lose revenue" explains how major airline firms in 2002 cut their business travel fares in an attempt to generate more business "and bring back business travelers who are staying at home, buying in advance or running to discount airlines" (McCartney, S. November 22, 2002). Of particular interest in this dynamic is the effect on total revenue generation resulting from the decrease in prices. Pricing logic might suggest that a decrease in fares would produce a loss in revenue however, in the case of Continental Airlines a fare decrease on a flight from Cleveland to Los Angeles from $2,000 to $716 resulted in Continental generating revenues equal to those at the previous higher rate, while gaining market share (McCartney, S. November 22, 2002). The rationale for this outcome can be explicated by the economic principle of price elasticity of…...

mla

References

Anderson, P., Mcllelan, R., Overton, J. & Wolfram, G. (November 13, 1997). Price

Elasticity of Demand. Mackinac Center for Public Policy. Retrieved March 30. 2011 from  http://www.mackinac.org/1247 

Mankiw, N.G. (2004). Principles of economics (3rd ed.). Chicago, IL: Thomson

South-Western.

Price Elasticity of Demand: Four Factors
Strolling through the aisles at the local Boston Store led me to the Jeans department where I was overwhelmed with the selection: Guess, alph Lauren, Levi Strauss, Calvin Klein, and others. Which of these products would I purchase and how would the price elasticity of demand impact my decision? The definition of price elasticity is straightforward: "how much the quantity demanded changes when the price changes; the formula written as percent change in quantity demanded divided by the percent change in price" (NetMBA. N.D.). A good is considered elastic (>1) if a price change elicits a greater proportional change in quantity demanded. Inelastic (...

mla

References

Mankiw, N.G. (2004). Principles of economics (3rd ed.). Chicago, IL: Thomson

South-Western.

NetMBA. (N.D.). Elasticity of demand. NetMBA. Retrieved April 29, 2011 from  http://www.netmba.com/econ/micro/demand/elasticity/price/ 

QuickMBA. (N.D.). Price Elasticity of Demand. QuickMBA. Retrieved April 29, 2011

As such, when evaluating the change in profit, we need to consider both alternatives and how the possible responses from the competitor will affect it. In the first case, with no response from the competitor, as I have mentioned previously, net sales are likely to increase due to positive price elasticity. In order to evaluate whether the net revenue is modified, we should use a figure example, considering the quantity sold

100 and price P = 10. The total net sales is 1000. On a 10% price cut (P = 9), we should estimate the quantity Q. At 115 (it shouldn't go up to 25%). As such, the net sales will be V = 1035, an increase of 35 units or 3.5%.

In the second scenario, the price cut will implicate a response from the competitor. The quantity will initially increase, only to later decrease after the competitor's price cut. In my…...

mla

Bibliography

1. Price Elasticity. On the Internet at http://ingrimayne.saintjoe.edu/econ/elasticity/Elastic1.html

Price Elasticity. On the Internet at http://ingrimayne.saintjoe.edu/econ/elasticity/Elastic1.html

price elasticity as a means of identifying a brand's competitors. The possibility of using the concept of price elasticity to identify a brand's competitors implies a relationship between the two brands (substitution), and between their relative elasticity (cross price elasticity). This essay explores those relationships.
It has been said of the law of demand -- that the higher the price of a good, the less that consumers will purchase -- that it is the "most famous law in economics, and the one that economists are most sure of." This law is so certain and so consistently observed because it effectively predicts consumer behavior. The law of demand is in fact one of the basic principles of microeconomics (Anderson, McClellan, Overton and olfram, 1997).

The law of demand also makes it possible to measure how the price of a product or brand affects the demand for it. The most commonly used method…...

mla

Works Cited

AS Markets (n.d.). Cross price elasticity of demand. Retrieved July 25, 2011 from  http://tutor2u.net/economics/revision-notes/as-markets-crossprice-elasticity-of-demand.html 

Anderson, P.L., McClellan, R.D., Overton, J.P. & Wolfram, G.L. (1997). Price elasticity of demand. Mackinac Center for Public Policy. Retrieved July 25, 2011 from  http://www.mackinac.org/1247 

EconPort. (2006). Cross price elasticity. Experimental Economics Center. Retrieved July 25, 2011 from  http://www.econport.org/content/handbook/Elasticity/Cross-Price-Elasticity.html 

Ellis-Christensen, T. (2011). What is price elasticity of demand? Retrieved July 25, 2011 from  http://www.wisegeek.com/what-is-price-elasticity-of-demand.htm

Apple Inc.
Feras Awwad

Apple is one of the world's principal producers of a product mix consisting of a range of electronics goods and gadgets, as well as their related software applications, in a broad range of different international industry segments. The company operates on an oligopolistic model and sells products that are relatively inelastic. A microeconomic analysis is used to discuss the relevant factors and make recommendations based on these insights.

Analysis of Apple Inc.

History of Apple Inc.

Supply and Demand for iPhone 7

Cost Structure

Apple's Market

Analysis of Apple Inc.

Similar to the path that Moore's law, the number of people and devices connected to the internet is growing at an exponential rate; although this trend could never mirror the advances in processing power that has been achieved, it is significant nonetheless. For example, in 2016, it was estimated that 3.4 billion people are connected to the internet which accounts for ~46% of the world's…...

mla

Works Cited

Archanco, E. (2017, March 30). The Price Elasticity of the iPhone Demand. Retrieved from The Technalyzer:  http://thetechnalyzer.com/price-elasticity-of-the-iPhone-demand/ 

Balani, M. (20'5, August 5). Apple is in the middle of a 'super cycle' that might hurt sales in China this year. Retrieved from Mukesh Balani:  https://mukeshbalani.wordpress.com/2015/08/05/apple-is-in-the-middle-of-a-super-cycle-that-might-hurt-sales-in-china-this-year-aapl/ 

Blodget, H. (2012, Aug 2). In Case You Had Any Doubts About Where Apple's Profit Comes From... Retrieved from Business Insider:  http://www.businessinsider.com/iPhone-profit-2012-8 

Campbell, M. (2016) Apple R&D spending jumps to $2.5B in Q2, accounted for 5% of total revenue. Apple Insider. Retrieved April 9, 2017, from  http://appleinsider.com/articles/16/04/27/apple-rd-spending-jumps-to-25b-in-q2-accounted-for-5-of-total-revenue

Economics
The concept is proportion of income devoted to a good typically applies to discussions about the price elasticity of demand. The basic concept of price elasticity of demand is that it is relational to the percentage change in the price of a good. But the proportion of income devoted to a good will have an impact on the elasticity. The best way to illustrate this is by comparing two different products.

A person pays rent, and they like to buy a coffee every morning. If their rent is $1,000 per month and the coffee is $2 per day (so $40 per month). The price of each increases by 10%. The percentage price increase is the same, but the rent is a much larger proportion of income. So the increase in the price of rent is $100, and the increase in the price of coffee is $4. The consumer is going to…...

Apple Inc. Supply and Demand
Apple is a U.S. multinational company that specializes in manufacturing and marketing of electronic products. Top Apple brands include iPhone, iPod, Apple Computer, and iPad. Globally, Apple is ranked as the second largest global electronic company with over $215.6 Billion revenue at the end of the 2016 fiscal year. Apart from the company superior financial performances, Apple has enjoyed high demand for its products globally based on the stylish method employed in designing the products. The iPhone is one of the major products of Apple Inc., and the company has recorded superior demand for the product since the product has been launched.

The objective of the paper is to investigate the supply and demand for the iPhone.

Supply and Demand for iPhone

The theory of supply and demand illustrates the quantity demanded versus the quantity supplied in the market. (Mankiw, 2007). The study discusses the supply and demand…...

mla

Reference

Statista (2017). Apple's revenue worldwide from 2004 to 2016 (in billion U.S. dollars). Statista Inc.

Statista (2017). Global Apple iPhone sales from 3rd quarter 2007 to 1st quarter 2017 (in million units) Statista Inc.

Mankiw, N. G. (2007). Principles of Economics, (4th Edition). Cengage Learning. USA.

Food Capital Budgeting
Strategy for Price Elasticity

Major effects of government policies on production and employment

Government egulations for fairness in the low-calorie, frozen microwavable food industry

Major Complexities in Expansion via Capital Projects & Key Actions

Convergence between the Interests of Stockholders and Managers

Strategy for Price Elasticity

The Price Elasticity is a tool that is used by economists and business to measure exactly the quantity response that is needed to adjust to a change in price. This gives a very good idea of the quantity that is supplied or demanded changes due to a change in the price. This is also defined by the degree of reaction of a demand or supply curve with respect to any change in price. The essentiality of a product often decides the price elasticity of the product and thus varies across a product range. The products that are considered to be necessities are also considered to be more insensitive…...

mla

References

4 Corporate Mergers Shot Down By the Government. (2014). Fusion. Retrieved 8 March 2016, from  https://fusion.net/story/4908/4-corporate-mergers-shot-down-by-the-government/ 

Alderman, N., Ivory, C., McLoughlin, I., & Vaughan, R. Managing complex projects.

Employee Stock Options Fact Sheet. (2016). Nceo.org. Retrieved 8 March 2016, from  https://www.nceo.org/articles/employee-stock-options-factsheet 

Gunay, S. (2008). Corporate governance theory: a comparative analysis of stockholder and stakeholder governance models. Bloomington: IN: iUniverse.