Elasticity
There are several companies who have elasticity and have had great success and great failures according to how they have responded to the changes in the market. The first company that I see to have elastic demand is Apple because as the prices of the devices they produce rise and fall, the demand also responds accordingly. For example when apple debut the apple iPod, its capabilities such as being able to hold 500 – 1000 songs, portable, small, and with great sound and it had the ability to organize your music like no other device before it. However as the demand for the device increased, so did the demand for its capabilities to become faster and better than before. This caused the manufacturers to have to increase the price of the device due to the increase of the need for new research, and new technologies such as faster microprocessors and touchscreen technology.
Since the price of the iPod has increased, more and more people began searching for mp3 alternatives to the iPod, which offer similar features and also did not require special software for commercial use, and for a much cheaper price. In order to increase the demand for this product I suggest giving more power to the consumer. For example I suggest allowing customers to customize each feature of each device. The power to customize each feature would attract more customers who would be willing to pay the slightly higher prices for the device. Features ranging from color, material, custom engravings, custom cases etc. According to techland.com “like many Apple products, the iPod wasn’t the first device of its kind. But like many examples of Jobs’ legacy, it was the product that did it best” (Miller, 2011). However this product is losing its spunk and needs a boost, and I believe the way to do it is by offering this new feature of customizable products. This could boost the demand and keep production cost fair.
The next company that I will examine is a company that has inelasticity. The company British Petroleum, who is one of the world’s largest producers of gas. They are also responsible for the terrible oil spill in 2010 on the Gulf of Mexico. Although this disaster happened on their watch, I believe British Petroleum has inelastic demand because the demand for gas seems to either stay the same. Even if the price of gas goes up, people still need to use gas and oil to heat their homes, power their vehicles, factories, and numbers gas powered appliances. According to Wikipedia, although the taxes rise and fall for gas, the demand stays the same or, just like tobacco and fire arms. (Wikipedia, 2012) Inelastic demand means that the price does not change the overall demand for a product, and if British Petroleum’s goal is to increase demand, they will have to increase access to their products through the production of more facilities such
you see is both the back of your car smashed and the other car. This is an example of an inelastic collision. Inelastic collisions are colliding objects that collide that stick together to become one and has the greatest loss of kinetic energy. Another type of collision is called an elastic collision. An elastic collision is when the objects don’t touch and no kinetic energy is lost. An example of an elastic collision is two toy trucks colliding with each other and no damage is being done. My model…
government applies the concept of price elasticity of demand to price goods and services it provides to the community. Additionally, the government derives the responsiveness of demand to predict the level of impact indirect taxes has on elastic, unit elastic and inelastic goods regarding revenue. Ultimately, the concept of elasticity of demand is both crucial to business firms in delegating the best price for the output and the government to assess the degree of impact indirect taxation has on revenue…
in the elastic part of the curve how should you change the price to increase revenue? Question 2 How would the following changes in price affect total revenue? That is, would total revenue increase, decline, or remain unchanged? (2 Mark for each) a. Price falls and demand is inelastic. Total revenue will decrease b. Price rises and demand is elastic. Total revenue will decrease c. Price rises and supply is elastic. Total revenue will increase d. Price rises and demand is inelastic. Total…
uk/aed/air/aircont.htm Number of Substitutes The demand for goods with many substitutes are likely to be elastic. The demand for goods with zero or very few substitutes is likely to be inelastic. Examples 1. Heart Medicine Inelastic because there are relatively few substitutes and many people need the medicine to stay well. Qd would not fall much even if price increased dramatically. 2. Bread elastic because there are many substitutes. If the P of Wonder Bread increased many people would choose another brand…
Illustration of an effective Price Ceiling creating a Shortage since Qd > Qs 13. Market in equilibrium with Consumer surplus shaded in yellow 14. Illustration of Perfectly Inelastic supply or demand 15. Illustration of Elastic Demand 16. Illustration of Inelastic Demand 17. Illustration of Perfectly Elastic supply or demand 18. Illustration of a Long-Run Average Total Cost Curve (∑ ATC curves for various plant sizes) 19. TFC + TVC = TC 20. TFC / Q = AFC 21…
easily people could switch from one product to another, and determines how elastic or inelastic a good is in the market with consumers purchase. Factors that affect price elasticity are Availabilities of substitutes, Degree of necessity, Proportion of income required by the item, Time period considered, Temporary price change and Price points. Availabilities of Substitutes The demand for a product or goods will be very elastic if some other s products can be used for it. A small rise in the price…
a change in price. If supply is elastic, producers can increase output without a rise in cost or a time delay If supply is inelastic, firms find it hard to change production in a given time period. Percentage change in quantity supplied divided by the percentage change in price When PES > 1, then supply is price elastic When PES < 1, then supply is price inelastic When PES = 0, supply is perfectly inelastic When PES = infinity, supply is perfectly elastic What factors affect the elasticity…
the price of cigarettes also had to raise, and according to the law of demand, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa. But in this example of cigarette, this good is an inelastic product because it’s known to be addicted because of its nicotine, the supply curve in the diagram would be more steep, even though the price goes up, the consumer of purchasing would just have a small decrease. 3. The law of demand says that consumers…
the goods bought/sold will be no change in the long run and the small change in short run because the demerit good is in elastic. And the price that buyers pay will be increase, because the indirect tax can be transferred for the customer. The deadweight loss from a tax is intimately connected to the supply and demand of the good being taxed. If either supply or demand is inelastic with respect to price, the deadweight loss will be low. But when designing a tax system, deadweight loss is not the only…
____________________________ Date of Experiment handed in: ____________________ learning objectives: In this laboratory activity we study elastic and inelastic collisions in one dimension and verify the principles of conservation of linear momentum and conservation of energy in an elastic collision in one dimension. We also verify the principle of conservation of linear momentum in explosions and in an inelastic collision in one dimension. Theory: The momentum p of an object is the product of its mass and its velocity:…
