Price Elasticity Essay

Price elasticity is an important concept to understand when beginning and maintaining a business that distributes goods or services. Elasticity is the economic concept that estimates when products should be introduced to consumers, and how (provided that all other variables remain constant) demand or supply will be affected by changes in the environment that affect price (Basic Economics, 2007-2010). Depending on how the percentage demanded/supplied is affected by price differentiation will determine whether or not a good or service is considerably elastic or inelastic, providing a sound guideline for business owners. The higher the elasticity, the more the demand will change if the price varies in the competitive market. Elasticity

There are various internal and external factors that can influence the development of innovations positively or negatively. External factors may include firm size, market structure, degree of industry concentration, and macroeconomic factors. Size of the firm tend to be more positive related to innovation in manufacturing and profit-making organizations as compared to non-profit making organization, and relationship that involves size and innovation will become stronger if a non-personnel or a long transformation measure of size has been applied, as compared to application of a personnel or a raw measure of size. Depending on the competition within the market for example a positive competition with favorable atmosphere, the firm will be successful in its kind of innovation. The way industries have been structured and how they change over time may have effect to the innovation among organizations. Their standards, the institutional setting and the process of liberalization and privatization also affect innovation.

Innovation and innovation strategies are critical to keeping companies competitive in their chosen fields of endeavor. Consumers benefit significantly from the availability of and access to the latest in technology. This paper

This research intends to explore innovation at an individual level, but in a context, where the roles and functions of an organization appear eminent either as a promoter or an inhibitor of innovation.

The price ceiling is the maximum price a seller is allowed to charge for a product or service. An impact on society includes when the prices are so high of a product, that no one can buy it. A price floor is the lowest legal price a product or service can be sold at. When market price is at its lowest, it may still be too high for consumers to purchase products. Governments can intervene for any purpose, and they are the ones who set these price controls.

Technological change is a fundamental driver of economic development and performance, not only at the level of firms and industries but also economies. Innovation is the organizational process through which new

Price elasticity of demand enables business organizations to predict how their total revenue will be effected in the event they change the prices of their products. When a given good has inelastic price elasticity of demand i.e. Ed 1, then the percentage change in the quantity demanded is greater that the change in price. Thus, raising the prices of such commodities results to decline in the total revenue because the business may loss customers to their competitors. Nonetheless, reducing the prices of goods with elastic elasticity of demand increases the total

B. Industry Dynamics: RLK Media is known for producing high-quality, American made products in the consumer electronics industry. This industry highly competitive due to the need of constant innovation. Consumers value new, cutting edge products which inevitably promote sales in the industry. However, innovation is also associated with increased competition, leading to decreased prices, decreased product life cycles, and increased risk from extensive R&D. Not only do companies need to continually investing to create the next “big hit”, they also are battling to be first to the market as many work on similar technologies. In order to reduce these high costs,

Diffusion of Innovations is to explain how innovations are taken up in a population. An innovation is an idea, people or organizational behaviour, or objective that is perceived as new by its audience.

Economic expectations a person has are normally based extrapolative historically, rationally. An extrapolative expectation is based on the idea that a trend will continue. Historically based expectations are based on past events about the future and rational expectations are forward-looking expectations that use available information. Consumer attitudes and expectations are important to economic recovery because consumer spending drives 70% of economic growth ("The Conference Board", 2012). For a lagging economy to grow consumer confidence must increase. The Consumer Confidence Index

Since firms facing an elastic demand can increase total revenue when they cut prices, the opposite condition exists when they try to raise prices. With many substitutes in consumption available, a price increase leads to a significant decline in consumption - the percentage change in quantity demanded exceeds the percentage change in price. Producers that raise prices when facing an elastic demand will find that total revenues decrease as the gain from charging higher prices is more than offset by a desertion of consumers to cheaper substitutes, with sales and output falling. When price

Study revealed inconsistence of PCI (persistent characteristics of innovation) in influencing the diffusion and adoption of an innovation which is similar to that of PAI (persistent attributes

Innovation refers to finding new ways to improve the existing products, services, processes, technologies, and employee performance in an organizational setup. In today's competitive business environment, organizations have to focus on bringing innovation in each and every aspect of their business operations; like products or service offerings, enterprise resource planning systems, marketing and promotional efforts, and organizational structure. The market challenges and competitive pressures also force organizations to use a blend of all these innovation processes in their business activities. Therefore, it is vital to give an equal focus on product innovation, process innovation, marketing innovation, and organizational innovation within the limited organizational resources and capabilities.

Now looking at the three marketplaces that we have chosen to explore for our product, we conclude that in terms of consumer behavior, buying habits, values and concerns, these three marketplaces are totally different from each other. It is very evident that each region requires a separate pricing strategy and so that is what we are going to follow in this global plan of our company.

Elasticity of demand is shown when the demands for a service or goods vary according to the price. Cross-price elasticity is shown by a change in the demand for an item relative to the change in the price of another. For substitutes, when there is a price increase of an item, there is an increase in the demand for another item. When viewing complements, if there is an increase in the price of an item, the demand for another item decreases. Income elasticity is shown when there is a change in the demand for a good relative to a change in income. This concept is shown in how people will change their spending habits when their income levels change. For