Notes On Long Term Investment Decisions

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Assignment 3 Long Term Investment Decisions
Deneice Wickens
Dr. Wui
ECO550
Strayer University
9/1/2014
Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rationale for your response. One of the main features being evaluated by the customers before buying any commodity is its price. Though customers evaluate other features also but the price conscious customers see the price of that product first before making any decision for buying it. All the commodities that are being bought by the customer fall in one of the three categories of elasticity of demand. They can have elastic demand, inelastic demand or unit elastic demand. Elasticity of demand is defined as a percentage change in demand of a product due to percentage change in its price (Cowell, F. A. 2006). If the 1 unit change in price of a good leads to more than one unit change in quantity demanded that product is called to have elastic demand. If the 1 unit change in price of the good lead to less than 1 unit change in quantity demanded of that good, it is called to have inelastic demand. If one unit change in price of good cause 1 unit change in quantity demanded of that good it is called to have unit elastic demand. In reality very few or almost none good possess the unit elastic demand. The price of good is very

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