Elasticity of Demand Essays

Elasticity of Demand Essays Elasticity of Demand Paper Elasticity of Demand Paper The purpose of this essay is to define elasticity of demand, cross-price elasticity, income elasticity, and explain the elastic coefficients for each. I will explain the contrast of and significance of difference between the three. I will also explain whether demand would tend to be more or less elastic for availability of substitutes, share of consumer income devoted to a good, and consumer’s time horizon, and give examples of each. Then, I will explain the logical impacts to business decision making that result from each. Last, I will differentiate between perfectly inelastic demand and perfectly inelastic demand, and illustrate the difference between the terms. Elasticity of demand, also known as price demand elasticity, is defined as the measurement of â€Å"the responsiveness of demand for a product following a change in its own price† (tutor2u. net). Sales may increase when a price goes down. Sales may also decrease when prices go up. Examples of products with elasticity of demand are appliances and cars. When prices go down on cars, more people will buy them. The same can be said for appliances. For necessities such as food and clothes, you will see no significant change in sales with changes in price. This is called inelasticity of demand (business dictionary. com). According to Mike Moffatt, former About. com Guide, the cross-price elasticity of demand measures the rate of response of quantity demanded of a good, due to the price change of another good†. Consumers may purchase more of one good when the price of its substitute increases. If the two goods are complements, meaning, you can’t have one without the other, a rise in the price of one good should cause the demand for both goods to fall. The formula for cross-price demand of elasticity is: (% Change in Quantity Demand for Good )/(% Change in Price for Good ) (economics. about. com). The measurement of how much the demand for goods change, with respect to a change in income, depends on whether the goods are luxuries or necessities. This measurement is known as income elasticity. With the increase of income, the demand for necessities may increase, also, but at a slower rate. Sometimes the increase in income can go toward luxuries. The demand for luxuries tends to increase at a higher rate in response to the increase of income (investopedia. com). Inferior goods have negative income elasticity because if a consumer can go without them, they will stop buying them. According to The Penguin Dictionary of Economics, â€Å"a good that is not inferior is a normal good† (inferior good (2003)). A normal good can become inferior over a period of time. An example of this is when a small apartment that you no longer have the need for because of a growing family. Normal goods have a positive elasticity because the demands for normal goods rise with income. The coefficient of income elasticity measures the percentage in change between two variables. The two variables are demand and income (IED= % change in quantity demanded/ % change in income) (Amosweb. com). Normal necessities and normal luxuries have positive coefficients because income and demand move in the same direction. Although the coefficient for inferior goods is usually negative, they can turn into a positive over a period of time. For example, in a recession, the need for an inferior good may become a necessity, thus increasing the demand for that good (tutor2u. net). The coefficient for cross-price elasticity is the percentage of change in demand of a product (a) /change in price of a product (b) (Wikipedia. org). This formula sometimes yields a negative value due to the relationship between price and quantity demanded. It also depends on if the goods are substitutes or complements. For a substitute, the increase in price for one good (a) will lead to the increase in demand for the other good (b), which makes the value of goods positive (economicsconcepts. com). This depends on if variable (a) is a necessity. In this case, the demand for that good may not change because of a change in price. According to J. Welkers, cross elasticity for complementary goods are negative because an increase in price of a product decreases the demand for that product (welkerswikinomics). The coefficient for elasticity of demand measures the relationship between two variables. A formula for figuring out the coefficient of elasticity of demand is: (percentage change in quantity) / (percentage change in price). The coefficient will be the percentage change in quantity demanded in response to a one percent change in price, and will determine is if the demand for a good is elastic (eod1) or inelastic (eod1). Knowing the coefficient for the demand of a product gives a business the edge because they will know when to make adjustments to price in order to increase the demand for a product. Cross-price elasticity, Income elasticity, and Elasticity of demand all have different coefficient ormulas. The difference between cross-price elasticity and income elasticity is that cross-price elasticity measure the percentage of change in demand of a product in relation to change in price, while income elasticity measures changes in demand in relation to changes in income. The difference between these two and elasticity of demand is that elasticity of demand measures the re sponsiveness of demand to a change in price. Elasticity of demand determines whether a company can increase or reduce their price on a product, and is therefore detrimental to a company that is trying to maximize their profits. Cross-price elasticity is similar, because it allows a company to market a product based on an estimate of the profit they believe they will make if they promote the sale of a good that’s already in demand by offering the complement at a discount to the consumer with a purchase. Once the consumer becomes a habitual buyer of the product, they are less sensitive to price changes. Knowing the income elasticity of demand for a good allows a business or firm to determine if a good is elastic or inelastic, meaning it may or not be sensitive to change in income (economics. about. om). These are the three determinants of elasticity demand: Availability of substitutes, share of consumer income devoted to a good, and consumer’s time horizon. â€Å" A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied† (investopedia. com). The availability of substitutes is very important because, the m ore substitutes you have the more elastic the demand will be. An example of elasticity of demand in relation to availability of substitutes is having two brands of the same shirt. If the price increases for the name brand shirt, consumers may begin buying the off brand shirt, instead. This leads to elasticity of demand. In order to make a profit, a business would have to increase the price for the good (investopedia. com). The logical impacts to business decision making that result from the availability of substitutes is a business will have to decrease their prices in order to stay competitive in the market. This is as a result of a decrease in demand. In order to reach equilibrium, prices will have to decrease before demand will rise (mindtools. com). The share of a consumer’s income they are willing to devote to a good or service will determine the elasticity of demand for a good. Elasticity of demand will vary, depending on the consumers’ perception of the value of a good. When a price increase on a product has a larger share of the consumer’s income, demand for the product may become more elastic because the consumer may buy less of the product. An example is when the price of paper towels goes up $1 a roll, and you have to reduce the amount you usually buy. But when a price increase only takes a small share of a consumer’s income, the opposite is correct. A consumer will buy more of a product, especially when it’s a brand name that they are true to. It really depends on how much of a jump in price it is, as well. Sometimes, they will just continue to buy the same amount of a good when there is a small increase in price. This makes the demand for a product less elastic because price has no or a relatively small effect on the quantity. A price increase on a good can make it seem more attractive. For example, when the price of gas goes up, consumers will adjust to the price change out of necessity. Price increase will hardly affect the demand for gas. The impact a consumer’s income devoted to a good has on a business’s decision making is when considering a price change, a business will need to know the effect the change in price will have on total revenue (en. wikipedia. org). They will need to estimate how sensitive the consumer will be to a price increases for a good, whether it is a necessity, luxury, normal or inferior good. The effect that a consumer’s time horizon has on elasticity of demand depends on the price elasticity in terms of necessity. If the product is a necessity to a consumer and there is no substitute, the consumer will continue buying that product (tutor2u. net). This makes the product inelastic or less elastic. If the consumer can find a substitute in the long run, and the price remains the same, the product will eventually become more elastic. An example of this is when a consumer faithfully purchases a case of cigarettes every week, but the price has increased by $5 because of a rise in taxes. The consumer’s income cannot support the increase in price. He can either cut back on consumption of this product or look for its substitute if there is any. If the consumer cuts back or stops buying the product as a result of a price increase, the decrease in demand will cause it to become more elastic. The logical impact that consumer time horizon has on a business’ decision making is that it determines the elasticity of demand for a product. If the price increases by even a small percentage, over time the demand will decrease. If there is no substitute for this product, it may still increase in elasticity, but at a slower rate. Perfectly elastic demand and Perfect inelastic demand effect price elasticity. When demand is perfectly elastic, any small decrease in price will increase the quantity supplied, infinitely. This is represented in a horizontal supply curve of the graph below. In contrast, when demand is perfectly inelastic, for any change in price, there is no change in the quantity demanded. This is represented in a vertical supply curve below (pinkmoney. com). The relationship between elasticity of demand and total revenue can aid a firm in setting its price. In relation to inelastic range of a demand curve, a price decrease would decrease total revenue (elasticity of demand (1995)). By increasing prices and minimizing demand, total revenue can be increased. For elastic range, if the price decreases, demand and total revenue will increase. Therefore, a company can maximize profit by decreasing their price if they have an elastic demand. The value of unitary elasticity is exactly 1, and defines a perfect response of quantity to price. If demand is unitary elastic range, change in price will cause the exact change in demand and revenue (amosweb. com). In a unit elastic supply curve, a 10% increase in price yields a 10% increase in quantity; a unit elastic demand curve will have a decrease in quantity of 10% with a price decrease of 10%. Below is a graph referencing the relationship between total revenue and elasticity of demand. (Businessbookmall. com) References amosweb. com/cgi-bin/awb_nav. pl? s=wpdc=dspk=income+elasticity+of+demand amosweb. com/cgi-bin/awb_nav. pl? s=wpdc=dspk=demand+elasticity+and+total+expenditure businessdictionary. com/definition/elasticity-of-demand. html businessbookmall. com/economics_19_how_elasticity_of_demand_affects_total_revenue. htm http://economics. about. com/cs/micfrohelp/a/cross_price_d. htm http://en. wikipedia.

Steps for Writing a Short Story (Fiction)

Steps for Writing a Short Story (Fiction) Steps for Writing a Short Story (Fiction) Writing a short story is a great way to practice writing skills. Because a short story limits your word count, you have to determine which details are important and delete the others. This can be a challenge for writers who have so many ideas they want to convey. If you have been tasked with writing a short story but are stuck, here’s some information to help: What is a Short Story? Short stories are fictional works. There are three kinds of short stories: Micro fiction can be as short as five to less than 100 words Flash fiction length ranges from 101 to 1,000 words Traditional can be as long as 5,000 words per story Elements of a Short Story Writers who excel at writing short stories are able to master combining five elements that must be present. These are: Characters these are people, animals, objects, or creatures that think and talk Setting the location where the story takes place Plot the series of events that lead to the climax Theme a general â€Å"truth† about life Point of View the vantage point the author uses to tell a story Steps to Writing a Short Story A short story is an artform that takes practice and dedication. Here is a five-step plan to help you improve your short story writing: Determine what message you’re trying to convey Choosing a theme for the story makes it easier to formulate a story. When you know which lessons the characters should learn or teach the readers, it helps inspire writing. Write a plot that coincides with the message Once you’ve figured your message, create a storyline that coincides with that theme. The first step is what message you want to tell. This second step is how you deliver that message. Create your character Memorable fiction characters are detailed. Give each a distinct personality and allow them to develop. Character development is one of the biggest challenges for short story writers. You only have a handful of pages to transform certain characters. Write an attention-grabbing first paragraph The first paragraph of your story captures the attention of an audience. Make that paragraph interesting by making a bold statement, relate to the audience, appeal to the senses, or add a little mystery. Build to the climax and end with a satisfying resolution Short stories begin closer to the climax than a regular novel would. Keep your build to the climax interesting and fast, and take care not to rush it. Here’s how to build a gripping end to the story: Write a clear-cut ending that explains exactly what happens Provide an open ending that lets the readers decide for themselves how the story ends Offer a monologue from one of the characters, tying it all together Create symbolic ending with meaning beyond the literal one One of the best ways to improve your creative writing skills is to keep reading. Observe the writing techniques of authors you enjoy, and try to develop your own creative writing style. If you need help with writing, editing, proofreading, or finishing a writing assignment, is at your service.

Research and develop knowledge on the Atrio PMS system and apply it to Paper

And develop knowledge on the Atrio PMS system and apply it to the Diva hotel( San Francisco) - Research Paper Example When people arrive at the hotel, they have to stroll past an amazing sidewalk of fame, which is the superb Diva sidewalk that has signatures of celebrity guests and entrance directly in its lobby. Recently, the hotel renovated its structure and now it offers most extraordinary features to its customers (Hotel Diva, 2012). Each room in the hotel has been renovated with the most superb amenities that comprise carpeting with cobalt, headboard sculptured with stainless steel, CD players set inside the room, two telephones that have touch-tone and allow global internet data ports, voicemail and fax machine, latest televisions with VCRs, pay-per-view movies, Nintendo, honor bar showcase that has special items of San Francisco, maid services, and fresh newspapers (Stowe, 2012). All dining facilities are superb: California Pizza Kitchen, which offers inside dining and room service, and Starbucks, which is adjacent to the lobby. Along with dining facility, there are top quality day laundry an d dry cleaning services, parking by valets that offer parking within and outside privileges, workout room with complimentary cardio services, video library that has a range of newly released films, a caretaker lounge that has magazines, brochures of tourism in San Francisco, literature on San Francisco, as well as green apples of Granny Smith and a gourmet coffee. The hotel is fully-equipped for business; it offers wireless high-speed internet access (â€Å"The Future of Hospitality is Here†, 2012). The target market of Hotel Diva comprises rich people looking for best quality services and complete access to all mandatory amenities. According to Creamer (2012), Diva Hotel has a reputation for offering customized services that are in accordance with customer demands; its management supports innovation and even has boutique properties that are providing access to ample services in a nearby location. The main objective of Hotel Diva is to exceed customer expectations by providin g superb quality services and instant access to the most diverse range of facilities (Hotel Diva, 2012). ATRIO Property Management System (PMS) PAR Springer-Miller Systems, Inc., commonly known as PSMS is the wholly owned subsidiary of PAR Technology Corporation, which is recognized globally for providing hospitality management systems that are guest-centric, so that hotels, restaurants and all companies of hospitality industry can effectively manage their operations (ParTech, Inc., 2011). The company is well-known for development of ATRIO system for hospitality industry that can revolutionize the operations of all companies present in this particular industry. ATRIO platform of solutions is believed to be the latest generation of hospitality management software, which have been purchased by and built for hotels so that they can maintain their IT infrastructure (â€Å"ATRIO Guest Experience Management†, 2012). Since technological advancements happen on an ongoing basis, it is crucial for companies to upgrade their IT systems so that they have well-designed IT infrastructures that will allow them to integrate all requirements of hotel businesses; ATRIO is the best alternative for IT solutions, as it allows hotel owners to save money and control their IT cost. Every hotel and resort has a choice of deployment either on premises or on cloud or even a combination of

The history and evolution of La Cosa Nostra Essay

The history and evolution of La Cosa Nostra - Essay Example La Cosa Nostra, over several years, founded its reputation for the cold-blooded use of violence. This aggression has taken place generally in the form of thrashings and assassinations. Personal aggression, and to a lesser extent it was brutality against property, such as, intimidations, fire-raising, blasts, is the distinctive pattern of the methodical use of aggression as an instrument of doing business. Violence and the threat of aggression were the ways by which the LCN gained monopoly control over a variety of illegal enterprises. It disheartened and abolished competitors, and it strengthened the reputation and trustworthiness of the LCN. Aggression is also used for in-house discipline. By the mid 1950s, Cosa Nostra thought of shifting their business to the cities from the rural areas. They understood that they could achieve financial gains only in cities. The industrial boom took place in the cities of Sicily. Here, the gains in terms of real estate, construction, and transporta tion were more hopeful. Thus, they turned out to be industrialists and became an element of the urban enterprise.

Sin and Virtue in the works of Freud and Dante Essay -- essays researc

Religion is arguably most influential when concerning politics, society, and individuality. This belief system provides most people with somewhat of a 'guideline' on how to live their lives on a daily basis, depending on which religion one follows. One of the major underlying aspects of religion, Catholicism or Christianity in particular, is to show guilt or sorrow to God for one's own sins and to ask for forgiveness on Earth so when Judgment Day comes the gates of heaven will open. A follower of Christianity is expected to follow the divine doctrine (e.g. The Ten Commandments) and any deviation requires repentance. If one does not ask for forgiveness for his sins, the common belief is that he will be sent to Hell upon death, spending an eternity in damnation. But how does this affect life on Earth? It seems that the individual harbors an internal battle between acting on instinctual desires and what is deemed right or wrong according to God. This self-war creates a sense of guilt. G uilt and sin are closely related to one another in terms of Sigmund Freud's analysis of religion in civilization and can be further compared to Dante's account of sin and the afterlife. In Civilization and Its Discontents, one of Freud?s main purposes is to point out the effect of the relationship between the human conscience and religion. Freud?s central view of religion is that it is an illusion created, and even needed, by man to attain a sense of security from ?an enormously exalted father? who watches over his life and promises a better afterlife (Freud 22). Individually, humans portray through behavior what their motivation in life is: to attain happiness. But religion only offers one road to happiness, and that road is through God. ?Its tech... ...ness, heightens the demands of his conscience, imposes abstinences on himself and punishes himself with penances? (Freud 87). The same can be said according to Dante, but instead of turning to the superego, one turns to God as Dante did while he was ?lost in the dark wood?. An individual looks for a way of escaping these disparaging emotions and searches for a path that will lead to ultimate happiness?usually through and with God. As the purpose of Dante?s Inferno was to understand sin in a way that will allow him to lead a more virtuous life, so was Freud?s theory that the more aware of your guilt the more able you are to recognize what it means to be virtuous. The more aware an individual is of his sin or guilt, the better his ability to repent and achieve virtuosity. This in turn makes peace with God and/or within him and it is here that one achieves redemption.

Swimming Sport How Import

Student Name: Fatma Mohamed Hany Swimming Sport Swimming sport is one of the best sports which have a lot of advantages and few disadvantages. It is useful to any one and healthy, but it needs some conditions in order to be able to reduce or avoid its disadvantages. Swimming as a sport is considered healthy which can be continued for a lifetime. It is good for heart, muscle tone, and maintain healthy joints. Any person can start learning swimming at young age and continue use this sport to the last day in his or her life. Also, it cools you off, especially in summer when the weather is hot and humid. In addition to that swimming is a great exercise without the weight pounding you. It is nice for any one and it calms you. It is good as a recreational activity. It helps in building character such as time management and discipline. It builds endurance, fitness and muscles strength. It makes your body flexible and comfortable. It puts very little stress on joints and does need strong muscle to play it. Therefore, it is good for you mental health because it calms you. It does help you lose weight when person swims faster a little bit. One more advantage, it reduces the risk of drowning. In the matter of facts I found that there are no major disadvantages for the swimming sports. If you do mined not having darker skin, it cause tanned body. It does a little to lose weight, because swimming is water based exercise. If you swim in a chlorinated pool be aware that you are absorbing a lot of the chemical through your skin. Public pools are not always clean. The contaminated water makes your skin dirt. That means you stop burning calories once you leave water owning to its cooling effect. Therefore, it is important to alternate other sports such as running or bicycling to sustain weight loss. One more disadvantage for many people that is caused damaged hair. Finally, I prefer swimming sport because it is safe, easy to me. It is not risky as karate, boxing or horseback riding. I consider swimming the best summer sport of all.

Organizational Socialization and Job Satisfaction

Organizational Socialization and Job Satisfaction (intoduction) Job satisfaction Job satisfaction is the way a person feels about his or her job (Jex amp; Britt, 2008). Job satisfaction is also the attitude a person possesses towards his or her job. A person may feel like his or her job is demanding, interesting, rewarding, or outright stressful, and demeaning. A person who is happy with his or her job demonstrates a positive attitude about the job. Several factors play a key role in how a person feels about his or her job such as emotional intelligence of management, work conditions, pay, promotions, compensation, advancement opportunities, benefits, communication, and recognition. Impact of Organizational Socialization on Job†¦show more content†¦The study supports the reciprocity of socialization between the newcomer and members of the workgroup as a significant factor of successful integration. Korte (2009) makes the observation that traditional human resources development (HRD) views tend to underestimate the dynamic social processes of members within the workgroup. The data of the study indicates that high-quality relationships have a positive effect on learning and incorporation into the workgroup and thereby the organization although the strategy is not uniformly applied across the workgroups of this company. These observations indicate a more strategic view for HRD that goes beyond socialization. HRD should serve the collective needs of the organization, not just the characteristics of individuals new to or established within the organization. Accordingly, HRD professionals should develop organizational models for learning, performance, and integration that develop effective social dynamics across the organization. These enhanced social dynamics are of significant strategic importance to HRD in organizations wanting to increase capacity, increase their competitiveness, and attract and retain new talent for future expansion. The Relationship between Organizational Commitment and Job Satisfaction The relationship between organizational commitment and job satisfaction has a very strong desire to have goals and values of the organization, a desire to belong to the organization and a willingness toShow MoreRelatedJob Satisfaction in Organizational Psychology1537 Words   |  7 PagesJob Satisfaction in Organizational Psychology Job satisfaction can be known to some people as an important element in their lives. If an individual is unhappy with their occupation it may affect other parts of their life. Job satisfaction can be seen in what one wants in a job as to what one has in their current job. 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