I need a reply to this post below that is 150 words,

 

Explain why the demand for the good or service provided by a firm is elastic or inelastic. How does the elastic or inelastic demand influence pricing decisions by the firm to maximize profit? What are the impacts of elastic demand and inelastic demand on total revenue?

 

A product demand is elastic if a specific percentage change in price results in a larger percentage change in quantity demanded. On the other hand, an products demand is inelastic is a specific percentage change in price produces a smaller percentage change in quantity. This influences price decision by a firm because it helps them to understand what a consumer is willing to pay for a product whether it is wanted or needed. The companies can use the information on deciding what to charge for a product in order to make the max profit for the company. The most important elasticity for a company is its effect on the companyâs total revenue. With the total revenue test, companies can determine that if total revenue changes in the opposite direction as the product price, then the demand will be considered elastic. If the total revenue changes in the same direction, however demand will be considered inelastic.

 

Provide examples on how the availability of close substitutes affects price elasticity of demand for a good or service.

The availability of close substitute products affect the price elasticity of demand for a product because generally the more that is available, the greater the price elasticity of demand. The narrower a product is or how easy it can be replaced determines its elasticity of demand. It basically depends on how good the product is and the ease of using another in its place.

 

Give specific examples of necessities or luxuries, and explain how they affect price elasticity of goods or services.

Some specific examples of necessities or luxuries that might affect price elasticity of the good would be things such as automobiles, gasoline, name brand shoes, many brands of ingredients for recipes. These are all products that we either think we need or must have. Some of these things can easily be replaced for others and you would be able to create the same ending desire. Automobiles, some people enjoy the luxury cars, where as they could just use a cheaper more affordable one. Shoes can easily be replaced with another brand at another price. Finally ingredients in a recipe can easily be replaced with another brand at a cheaper price to create the same product.

SuperTutor

(15)

Status NEW Posted 28 Apr 2017 02:04 AM My Price 9.00

-----------

Attachments

file 1493348482-Solutions file.docx preview (56 words )

S-----------olu-----------tio-----------ns -----------fil-----------e -----------Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k y-----------ou -----------for----------- yo-----------ur -----------int-----------ere-----------st -----------and----------- bu-----------yin-----------g m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l b-----------e q-----------uic-----------kly----------- on-----------lin-----------e a-----------nd -----------giv-----------e y-----------ou -----------exa-----------ct -----------fil-----------e a-----------nd -----------the----------- sa-----------me -----------fil-----------e i-----------s a-----------lso----------- se-----------nt -----------to -----------you-----------r e-----------mai-----------l t-----------hat----------- is----------- re-----------gis-----------ter-----------ed -----------onÂ----------- th-----------is -----------web-----------sit-----------e. ----------- H-----------YPE-----------RLI-----------NK -----------&qu-----------ot;-----------htt-----------p:/-----------/wo-----------rkb-----------ank-----------247-----------.co-----------m/&-----------quo-----------t; -----------\t -----------&qu-----------ot;-----------_bl-----------ank-----------&qu-----------ot;----------- -----------Tha-----------nk -----------you----------- -----------

Not Rated(0)

• Buy Answer