Description
Purpose
It is important to understand the elasticity of one’s good or service so that decisions can be made as to pricing as well as production. Price elasticity helps with pricing decisions and income elasticity let’s one know if the product is a normal or inferior good. In this assignment you will use the company you selected to practice making decisions based on elasticity.
Instructions
Select any company and using the company you have chosen for analysis conduct research to determine the following and then write a paper addressing this research:
Is the good or service sold by the company price elastic or inelastic?
How price elastic or inelastic is it?
How important is the income elasticity of demand for this good or service?
Is the product a normal good or an inferior good?
What is the elasticity of supply for this good or service? Will the company be able to respond to changes in price?
Based on your research, what strategies would work for your company to maximize revenue and profits?
The paper should be 2 1/2 – 3 pages typed (font size 12, double spaced, Times New Roman), adhering to proper grammar, writing structure, topic organization, clarity of thought, and use of supplemental content.
Your paper must adhere to APA citation guidelines.