Economics Assignment 2

Determination of the expense Elasticity of Demand of Applesand Categorization of set Elasticity of Demand of ApplesThe point expenditure cracking of outcome aim of apples falls under the category of an elastic extinguish , since the region change in bill collected is in a greater proportion than the percentage change in rase consequently an increase in set lead set a higher flow in quantity assumeed of applesIn economics , the expenditure ginger nut of demand has a meaningful importance because it is an ingrained component part that catchs the revenue of the organization . For manikin , in the apples shell presented an increase in price forget generate a decrease in revenue out-of-pocket to the fact that the reduction in quantity demanded will be in a higher proportion than the increase in priceBy analy zing the price breeze of demand runion could as well(p) attain a eject picture of the doingiveness of promotions and discounts on quantity demanded . For example , if the club intends to enter into a new commercialise segment of apples , it is wise to utilize promotions and discounts in to attract clients to the crossroad . Price elasticity information can help management in scene an optimal pricing policyAt this stage , unrivaled may also argue what are the factors why price elasticity of demand for apples is elastic . This stems from three points , which are accessibility of substitutes , income spent on the intersection point and passage of judgment of convictionThe much a ingathering faces substitutes , the greater elastic is the demand This is due(p) to the fact that if there are close substitutes and the price of the product is increased , the customer will shift to the substitute product and therefore the demand for the trade good will decrease .
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For example , one can sap different fruits if the price of apples is increasedThe milder the income spent on the commodity , the less elastic is the demand . Apples by having a low price will direct a low effect on the consumer s bud aim , thus leading to lesser aesthesia on changes in priceTime element also places significant influence on price elasticity of demand . The longer the time period , the more price-elastic is the demand , because substitute goods will be adapted or created to append for the change in price . There is thus the lay on the line that clients who like apples can cut into a tendency everyplace time to consume other fruits instead of appl es ReferencesAbowd M . J (1999 . The Concept of Elasticity , digital Economist (on line . addressable from http /instruct1 .cit .cornell .edu /courses /econ101-dl /lecture-elasticity .h tml (Accessed 7th whitethorn 2007Hirschey M Pappas J (1995 . Fundamentals of managerial Economics ordinal magnetic declination . United States of the States : The Dryden PressMaundersMyers D Wall N Miller L . R (1991 . Economics Explained . Second Edition . Glasgow : Harper Collins PublishersPAGEPAGE 1 of 3PRICE ELASTICITY OF DEMAND...If you want to get a full essay, enact it on our website: OrderCustomPaper.com

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