According to Kalwani, Heikki and Yoshi (2010), elasticity of demand can be categorized as unitary, elastic or inelastic. Elastic demand is associated with significant changes in quantity demanded due to change in…
Download file to see previous pages...
Therefore, the demand is inelastic, meaning that a change in price would not significantly affect the quantity demanded. When elasticity of demand is referred to as unitary, this means it equals one and as such, any change in price will have an equal impact on quantity demanded. Price elasticity of demand (PED) refers to change in quantity demanded due to percentage change in price. The value of price elasticity is similar at all points along the demand horizontal curve. The same case applies to price inelastic demand (PID) which is represented by a vertical line.
According to Gupta (2008), PED is defined as a measure of responsiveness of quantity demanded to changes in price. Demand is said to be elastic when PED is greater than one. Further, this indicates that consumers are very sensitive to changes in price. One percentage change in price will lead to a drop in quantity demanded by more than one percentage. Similarly, when PED is less than one, it is interpreted that consumers are insensitive to price changes and any increase in price will cause a decline in quantity demanded by less than one percentage. Ideally, the effect of price increase has a significant effect on Autoedge total revenue. As such, PED becomes paramount for the company as it seeks to maximize revenues. In this regard, if Autoedge finds its PED to be relatively inelastic, it may decide to raise prices since the auto parts would be sold at high prices without adversely affecting sales. Similarly, if Autoedge finds its PED to be inelastic, it may choose to lower prices in order to enable the business increase the number of units sold and hence revenue without necessarily losing customers.
It is worth noting that when demand is perfectly elastic as represented by a horizontal curve, any increase in price leads to zero units demanded. On the other hand, if the demand is found to be perfectly
...Download file to see next pagesRead More
Taking a look at the automotive industry, it is not hard to make out that the business tops in terms of revenue considering that almost all individuals use or have ever used anything from the automotive industry (Warren, Reeve & Duchac, 2012). The term, automotive industry, is used to describe the companies and organizations that deal specifically with motor vehicles, motorcycles and the rest.
The focus would be on the untapped markets, enlargement as a company and coming up with plans for development. It was clear that there was lack of uniformity in the information set up of the organization. This resulted to inaccuracy and inefficiency. Potential business and customer information was also not well documented due to poor record keeping methods by the staff.
Among the roles that were required to be executed include; end user roles, business analyst and team leader role. Whereby, the consultation cost for the vendors was $140 per hour, business analysts, and cost was $120 per hour, programmers and testers was costing $100 per hour.
Moreover, stakeholder management process helps an organization to develop a communication plan in order to realize a significant public prestige of the assigned project. Communication about operating and building a depot is an important factor for effective realization process (Heldman, 2009).
More importantly, it should be noted that project management is characterized by a lot of changing demands and managers must always find ways and means of meeting such demands. There has always been a question on whether project
For this there is a need of creating a list of cultural, financial, legal and economic factor that must be considered by Autoedge about the location of its manufacturing operations. Some of the members of the board may
Since the external environment of this business is quite competitive, it is upon the top management of this organization to come up with strategies which will ensure that we emerge as the best alternative in the market. However, all these can not be
Having studied medical terminology anatomy and physiology, I am accustomed to functioning of medical assistants. It’s to my inclination that clients leave our premises fully satisfied and ready to come back incase need
Immediately after the earthquake, emergency medical teams were dispersed in Wenchuan County to take care of the injured. On the same day, more than 50,000 army officers and policemen were dispatched to assist in
3 Pages(750 words)Assignment
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Assignment on topic Phase 2 Discussion Board for FREE!