ECON1002_Week 2 Journal Elasticity_Webster.docx

ECON1002_Week 2 Journal Elasticity_Webster.docx - Adrianna...

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Adrianna Webster ECON1002 9/12/17 Week 2: Elasticity Journal Price elasticity is able to show businesses how much of an impact pricing of an item will have on the customers will to pay that specific item. So, with that being said, if I were a manager I would be taking strong consideration with this model, whether a goods (especially those that are not necessities) demand increase/decrease with price fluctuation. I would be aware of which goods have inelastic demands, and which have elastic demand, meaning which are sensitive to pricing and which are not, which is also known as the total revenue test. This would determine my pricing strategy and which goods I am able to maximize my profits on. There are many other factors that need to be looked at, such as the products brands, whether it is a generic store brand or highly reputable brand. Many stores, such as Walmart, Target etc. have their own brand of most items, that are priced slightly lower than the non-generic brand
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