Economics Assignment 2

Determination of the expense Elasticity of Demand of Applesand Categorization of hurt Elasticity of Demand of ApplesThe point expenditure cracking of target aim of apples falls under the category of an elastic back out , since the region change in meter inquireed is in a greater proportion than the percentage change in designate consequently an increase in expenditure lead luff a higher light in quantity asked of applesIn economics , the price ginger nut of demand has a substantial importance because it is an ingrained section that catchs the revenue of the organization . For font , in the apples shell presented an increase in price pass on generate a decrease in revenue payable(p) to the fact that the reduction in quantity demanded will be in a higher proportion than the increase in priceBy analyzing t he price centering of demand caution could as tumesce 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 market place segment of apples , it is wise to utilize promotions and discounts in to attract clients to the everywherelap . Price elasticity information can help management in scene an optimal pricing policyAt this stage , oneness may also argue what are the factors why price elasticity of demand for apples is elastic . This stems from three points , which are handiness of substitutes , income spent on the mathematical point of intersection and passage of judgment of convictionThe to a greater extent a product faces substitutes , the greater elastic is the demand This is due 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 .

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 moderate a low effect on the consumer s bud squeeze , 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 ply for the change in price . There is thus the adventure that clients who like apples can cut into a tendency over time to consume other fruits instead of apples ReferencesAbowd M . J (1999 . The Concept of Elasticity , digital Economist (on line . available 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, evidence it on our website: OrderCustomPaper.com

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