Supply Demand Elasticity

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

In this paper, we examine Happy Pet Clinic, a local veterinary clinic, and how the principles of elasticity of demand might frame its pricing decisions and planning. As a small practice, every change the managers make can have a significant impact on the clinic 's income. Price Elasticity of Demand, Cross Price Elasticity of Demand, and Income Elasticity of Demand concepts can be used to analyze and estimate how prices changes may affect the clinic 's bottom line

The price adjusts to rise when the quantity demanded exceeds the quantity supplied and for price to fall when the quantity supplied exceeds the quantity demanded is a central elements to supply and demand. Although individuals tendencies to change prices exist as quantity supplied and quantity demanded differ the changes in price brings the law of supply and demand into play. Whenever the quantity supplied and quantity demanded are unequal, price will stay the same cause no one will have an incentive to change. One thing to remember equilibrium is not the model framework they use to look at the world. Although to establishing the current value of a consumer product Economics has evolved through the centuries there are a few factors that led to a change in

People throughout the United States often turn to chocolate for a sweet treat. We eat chocolate when we feel stressed, and we purchase tons of chocolate for holidays and parties. There are so many types and brands of chocolates that are so readily available, and people often do not take the time to understand the history of chocolate. How many people actually know where chocolate comes from, or how chocolate is even made? How often do we think about the impact that the incorporation of chocolate into our diets have impacted our health and the economy? In this paper, I will discuss the history and cultural significance of chocolate, as well as the health benefits and consequences that come from eating chocolate.

If we eat chocolate then through trading in some way we are all involved whether it is the governments, the farmers, the chocolate manufacturers, or consumers who unknowingly buy chocolate we are all responsible for the atrocity that is child labour in West Africa.

Based on the above description, forms of elasticity will affect business decisions and pricing strategies differently depending on the nature and type of products or services being offered. Business organizations whose product offerings have elastic and perfectly elastic price elasticities of demand should not attempt to raise prices of their products because it will cause the quantity demanded and consequently total revenues to drop drastically. Businesses can there use the price elasticities of demand to determine whether the proposed changes in their prices will raise or reduce their total revenue. The following expression may be useful in helping business organizations to determine the impacts of elasticities on their total revenues based on the suggested price changes.

Market supply and demand determine the price therefore the price is elastic because the supply

Close to half of the worlds chocolate is made from the highly prized top-quality cocoa

Chocolate. It is an American necessity. The prominence of chocolate in the American lifestyle is anything but new; it is a “go-to” gift for Valentines Day, Easter, birthdays, anniversaries, etc. and was recently named the top snack in a global survey (Wong). The evolution of the cacao plant into chocolate exhibits ongoing cultural and economic effects that cacao has and have had on Latin America and its import countries, from the use of cacao in ceremonies and rituals and for medicinal purposes, to colonial cacao plantations, and finally to present-day mass production of chocolate and chocolate products. Long-term high demand for chocolate has kept the market for cocoa beans open; today, there exists various fair trade agreements between

Price elasticity of demand is an economic measure that is used to measure the degree of responsiveness of the quantity demanded of a good to change in its price, when all other influences on buyers remain the same.

Supply is the quantity of a product that producers want to sell at a specific price. The number one supply determinant for a company is the cost of production. The three other main determinants of supply are; improvements in technology, number of sellers, and the forecasted market expectations on future pricing. There are many other factors that may also lead to a change in supply; more favorable seasonal conditions, a fall in the cost of other goods resulting in less profit to produce them, and resources being shifted to the production of the good in question when it is more profitable.

Price elasticity of demand is given by the formula PED= ΔQD/ΔP.P/QD. Given a regression equation, ΔQD/ΔP is given by the coefficient of price, in this case – 100 (Negi, 2010). To obtain the value of QD, we replace the values of the independent variables into the regression equation as follows.

If the demand for the good or services of the company is elastic then the change in quantity demanded would be greater than a change in price. Let’s say the 10 percent decrease in price will cause increase in demand for 20 percent. The effect of this changes is that customers buying more products of this company. They are buying it for lower price but the price decrease outweigh by increasing quantity of the products or services. In this case the company benefits from these changes by raising profits. On the other hand, if company would raise the prices for the product the quantity will decrease so does the profit.

Chocolate, one of America’s favorite treats, is one that is not only steeped in rich flavor, but deep in history, economic, and social significance as well. It’s often scarcely known to the general populace as to the where this sweet item first originated or what brought it into our candy stores. But in spite of this, there are two things that can be duly noted about chocolate: one, is that it

“CHOCOMADE” fabrica, distribuye y vende una amplia línea de productos de confitería, tanto de chocolate y no-chocolate destinado al mercado nacional e internacional; confiamos en la calidad del producto y en la satisfacción de