eco 550 assign 1 week 3 - Demand Estimation Tina Thomas ECO...

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Demand Estimation Tina Thomas ECO 550 – Managerial Economics & Global Week 3 – Assignment 1: Demand Estimation Instructor – Michael Schnur Strayer University
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Demand Estimation The elasticity calculation is – 0.443 and because the results of the elasticity of demand is less than one it makes this inelastic. I think that the strategy for this demand would be set up something short or long term which would be to increase the price of the product by about 50 cents and this would only change the price to $2.50. The reasoning behind this would be because by increasing the price, the product would still be cheaper than the price of the competitors, and our company would see greater profits (total revenue increased generated). The consumer would still purchase the product because it is inelastic and it a product that is needed to the increase in price would be reasonable and would not cause any harm to the business. According to the article posted on Launch House it states “With consumers spending the majority of their online time on social media sites, online media marketing has been an effective way for small businesses to enhance their customer relations and broaden their consumer based without hurting their bank account” (Launch, House, 2012). The elasticity of advertising calculations is +.2129. The elasticity results for advertising is a figure that is positive, and if there were to be an increase in the advertising figures then there will be results that are positive on the quantity demanded. I think that the strategy that could be used for a short time would be to increase each month the amounts because the more money that is spent on advertising this will have a great impact on sales which will be recognized by the company compared to the products of the competitors. Now all things considered that the sales of the product continue to go up, I
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