Application Of A Solar Panel Installation Contracting Business

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Table of Contents I. Introduction 2 II. Demand Determinants 3 a. Individual Determinant Research & Analysis b. Current Demand Data Analysis c. Price Elasticity of Demand d. Demand Graph Analysis III. Supply Determinants 5 a. Individual Supply Determinant Research & Analysis b. Current Supply Data Analysis c. Price Elasticity of Supply d. Supply Graph Analysis IV. Recommendations 8 V. References 9 Introduction Cindy is looking to start a Solar Panel Installation contracting business. She became interested in this endeavor when she has heard about cost savings that households and businesses save each year from installing solar panels on the roofs. Cindy also heard about the incentives for installing solar panels offered by the…show more content…
Demand Determinants Variable Income of Buyers Price of Goods Prices of Related Goods Tastes/ Preferences Consumer Market Expectations (if price will go up) qD = f (price, income, prices of related goods, tastes, expectations) (Amadeo, 2017). Price Elasticity of Demand Price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price elasticity of demand is a term in economics often used when discussing price sensitivity. The formula for calculating price elasticity of demand is: Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price If a small change in price is accompanied by a large change in quantity demanded, the product is said to be elastic (or responsive to price changes). Conversely, a product is inelastic if a large change in price is accompanied by a small amount of change in quantity demanded (Investopedia, 2017). Demand Graph Analysis Will be updated Supply Determinants When price changes, quantity supplied will change. That is a movement along the same supply curve. When factors other than price changes, supply curve will shift. Here are some determinants of the supply curve (Staff, 2017). Production cost: Since most private companies’ goal is profit maximization. Higher production cost will lower profit, thus hinder supply. Factors affecting production cost
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