country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Calculating Price Elasticity Of Demand

tag 0 Download3 Pages / 677 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question:

Discuss about the Calculating Price Elasticity of Demand.
 
 

Answer:

Introdcution:

Price elasticity of demand gives information to the seller about the possible reaction that the buyers will have upon a price change (Moffatt, 2017). This is very important therefore in deciding the price to charge for the goods produced. The topic of elasticity helps in understanding the nature of the good depending on the magnitude of demand. A good with a high demand even when the prices are high is considered price inelastic (Pettinger, 2017). Similarly, a good that demand is low when prices are high is considered price elastic. Elasticity helps the investor therefore in determining the changes that will occur to the revenues when they vary their prices. It is crucial for the Board of Schmeckt Gut to understand that raising the price does not always result in an increased revenue; it only happens when demand is inelastic to price. If the demand is elastic to price, even a price rise could result in a reduced revenue. The board should also understand that lowering prices may at sometimes increase the producer’s revenue; this is the case where demand is price elastic; this is because more consumers will demand the good.

In order to ensure that the introduction of Schmeckt Besser energy bar is smooth, the instructions the board should give the Schmeckt Gut Research Department are as follows. One is to determine the nature of the good which will determine the magnitude of need for this product. If the energy bar attests to be a necessity good, then the board should introduce the product at a higher price since demand will still be significant; otherwise it should be introduced at a lower price. The researchers should also identify the availability of close substitutes; if there are close substitutes, the energy bar will be price elastic and thus should be introduced at a lower price; otherwise it should be introduced at a higher price.  The price should be equal or lower than for the close substitutes if available to make it more attractive in the market.

Price ($ per Energy Bar)

Quantity Demanded (Thousands per Day)

PQ

1

30

30

1.5

25

37.5

2

20

40

2.5

15

37.5

3

10

30

$2 is the price that maximizes total revenue since it is giving the highest revenue of $40,000.

 

The relationship between the Energy bars from Schmeckt Gut and those from Fly High is for complementary goods. This is because the movement between the quantity demanded for Schmeckt Gut Energy bars and the price for Fly High Energy bars is on opposite directions (Arnold, 2015). This is represented by the negative sign of the cross-elasticity of demand.

The Schmeckt Besser energy bar could be smoothly introduced into the market by determining the nature of competition that exist in the market. Based on the argument that the Schmeckt is able to lower its prices so as to influence its quantity level, this makes this market an oligopoly. This is proved further by the influence of one price on the price of another producer. Further, we already confirm that this is not a perfectly competitive market because if it is, Schmeckt could not be concerned with the introduction price as it is already provided in the market. Thus, Schmeckt should understand how the players in the oligopoly markets influence the price and quantity level. This firm should also identify the target group and tailor its products according to this group so as to make the goods more competitive.

Schmeckt Gut Research Department specific tasks include the identification of the other players and analyze their characteristics such as price charged and their supply level. It should also have constant track on the strategy taken by the other players. This is important because any strategy taken by any single player will affect all the other players including Schmeckt.

 

References

Arnold, R. (2015). Microeconomics. South-Western: Cengage Learning.

Moffatt, M. (2017). A Primer on the Price Elasticity of Demand. ThoughtCo. Retrieved 21 October 2017, from https://www.thoughtco.com/price-elasticity-of-demand-overview-1146254.

Pettinger, T. (2017). Calculating Price Elasticity of Demand. Economicshelp.org. Retrieved 21 October 2017, from https://www.economicshelp.org/blog/195/economics/calculating-price-elasticity-of-demand/.

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2018). Calculating Price Elasticity Of Demand. Retrieved from https://myassignmenthelp.com/free-samples/calculating-price-elasticity-of-demand.

"Calculating Price Elasticity Of Demand." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/calculating-price-elasticity-of-demand.

My Assignment Help (2018) Calculating Price Elasticity Of Demand [Online]. Available from: https://myassignmenthelp.com/free-samples/calculating-price-elasticity-of-demand
[Accessed 03 June 2020].

My Assignment Help. 'Calculating Price Elasticity Of Demand' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/calculating-price-elasticity-of-demand> accessed 03 June 2020.

My Assignment Help. Calculating Price Elasticity Of Demand [Internet]. My Assignment Help. 2018 [cited 03 June 2020]. Available from: https://myassignmenthelp.com/free-samples/calculating-price-elasticity-of-demand.


MyAssignmenthelp.com is the perfect solution to render quality solution for all sort of academic issues. We have hired professionals from different fields of study to provide assistance with different subjects. We successfully have provided different types of assignment solutions on 100+ subjects. We have hired industry experts to deliver nursing assignment, hr assignment and finance assignment help. To offer quality content with IT assignments, we have hired IT professionals to render programming language assignment help and IT assignment help for other types of IT assignments as well.

Latest Management Samples

SBLC4001 Management Information Technology For PureGym Limited

Download : 0 | Pages : 11
  • Course Code: SBLC4001
  • University: University Of Wales Trinity Saint David
  • Country: United Kingdom

Answer: Introduction:   The report is a discussion on management information technology with special focus on how social media provides a platform to various businesses for communicating and delivering information to the social media. The company chosen here is PureGym Limited that represents a chain of no frill clubs meant especially for fitness in the United Kingdom (PureGym 2018). These chains of fitness club have its base point in...

Read More arrow

MKT220 Business Research Methodology For Educational Recordings

Download : 0 | Pages : 5
  • Course Code: MKT220
  • University: Charles Sturt University
  • Country: Australia

Answer: 1. Interviewee: “The use of smart speakers is highly favourable in my house and each and every member in the house uses it for various reasons [8 second pause]. There is no particular purpose for using the voice-activated speaker in my voice, as we use it as per our requirement [6 second pause]. For instance, I use the voice-activated speaker for listening to music, as listening to music after hectic days calms me down. Oh, Yes! ...

Read More arrow

LD0474 Strategic Management For Competitive Advantage

Download : 0 | Pages : 9

Answer: Introduction  The main purpose of this assignment is to analyze the policies of Corporate Social Responsibility of a company. Corporate Social Responsibility (CSR) can be defined as the various policies which are followed by the business in order to ensure that the activities of the business do not affect the environment or the social well-being of the society (Schwartz, 2017). In other words, CSR policies requires the compa...

Read More arrow

ASB-2109 Marketing Research For Best Food And Grocery Retailer

Download : 0 | Pages : 12
  • Course Code: ASB-2109
  • University: Bangor University
  • Country: United Kingdom

Answer: Background of Waitrose Waitrose has been known as the main supermarket chain to sell huge range of organic and free range of products to the customers. This organization was also identified as Best Food and Grocery Retailer in the Verdict Consumer Satisfaction Awards in the year 2016. Waitrose has near about 352 branches including 30 little convenience stores across the UK, Scotland, Wales and England. In the year 2015, this company rec...

Read More arrow

7HURM010W Readiness For Change And Building Change Ready Organisations

Download : 0 | Pages : 13
  • Course Code: 7HURM010W
  • University: Victoria University
  • Country: Australia

Answer: Introduction Change is inevitable in today’s business environment. Changes in an organization take place whenever a company tries to reach its desired state somewhere in the future and to achieve it, goes through considerable transitions (Hayes 2014). These changes can be organized and managed by the simple processes of planning and bringing about the changes in the organization such that the employee resistance could be minimiz...

Read More arrow
Next
watch

Save Time & improve Grade

Just share Requriment and get customize Solution.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,328,472

Orders

4.9/5

Overall Rating

5,076

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

134 Order Completed

95% Response Time

Thomas Nelson

MS in Information Systems Technology with Specialization in Database Administration

New Jersey, United States

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

184 Order Completed

96% Response Time

Arapera Billing

Masters in Management, MMgt

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

154 Order Completed

97% Response Time

Harold Alderete

PhD in Economics

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

203 Order Completed

97% Response Time

Richard Alpert

PhD in Psychology

London, United Kingdom

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Receive good grades for the said subject even receive my work in the quickest possible time, although there were spelling mistakes, it was overall a good work.

flag

User Id: 421441 - 03 Jun 2020

Australia

student rating student rating student rating student rating student rating

Work well done. I am very happy with the information received and the level of service is top class.

flag

User Id: 385702 - 03 Jun 2020

Australia

student rating student rating student rating student rating student rating

Great work is done by experts. All the requirements are done whatever, I asked for> I again appreciate the whole team. I would rate 5 stars to them. thanks

flag

User Id: 279240 - 03 Jun 2020

Australia

student rating student rating student rating student rating student rating

It was good, but could be better if the pictures weren't used for case studies. Also the plaigarism was low.

flag

User Id: 58382 - 03 Jun 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?