Companies routinely use elasticity of demand (aka: price elasticity) to determine what prices to charge and the resulting revenue from the sales of products and services.
For this discussion, you are one of the managers in your company, and in the next business meeting, you will be discussing with other managers and the company’s CEO what should be the pricing strategy and expected revenue for the sale of your company’s product or service. [If you work, then you can use your company or just pick or make-up a company and a product or service.] Economics homework help
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Now, consider the 4 seasons of the year. Given your company, its product or service, and your knowledge of elasticity of demand, you will need to determine what the elasticity value would most likely be, the economically appropriate pricing strategy, and the expected change in total revenue for each of the seasons. [For an example, see my discussion post, “Penguin Airways and its Fares,” for what this discussion entails.]
To receive full credit for this discussion, you need to post:
- The name of the company and its product or service.
- A brief description of the elasticity classification and value for the company’s product or service for each of the 4 seasons, including an explanation of why the elasticity value is what it is during the season.
- A brief description of the price change (i.e., either an increase or decrease) for each season.
- A brief description of the resulting change in the company’s total revenue (i.e., either increase or decrease) for each season. Economics homework help