Assignment
1) List the total sales figures for the last 5 years (an included graph or chart would be very helpful) then tell the reader what you notice. Are sales increasing or decreasing? Any easily known reasons why? Store openings or closing? New markets? New products? Just a paragraph or two on what you see (plus any graphs or charts) should be sufficient.
2) Incorporate at least two or three demand variables into your paper and briefly explain to the reader how these variables are affecting demand. Are these variables increasing demand? Decreasing demand? Why? Then take two or three supply variables and do the same thing explaining their effects on supply and why. Maybe two or three paragraphs for demand and two or three paragraphs for supply?
3) Then tell the reader what Price Elasticity of Demand is, how it is calculated, and what the result means. Explain the difference between inelastic and elastic then tell the reader if the primary product your firm sells is inelastic or elastic and why. How do the Determinants of the Price Elasticity of Demand affect elasticity (hint: starts at page 178). Maybe two or three paragraphs?
4) Then tell the reader how these Determinants (or factors) affect the consumer responsiveness to price changes. Remember we discussed these significantly in our Discussion Board regarding the price of gasoline? We had discussed how consumers are "not very responsive" to price changes in gasoline and discussed, in that example, how it is due to "Availability of Substitutes". That is an example so relate your product to the Determinants and whether the consumer would be "responsive" to price changes and why. Maybe two or three paragraphs?
5) Lastly tell the reader how the price elasticity of demand impacts pricing decisions. What does that mean? Refer to pages 181-182 where the textbook discusses the Relationship between Price Elasticity of Demand and Total Revenue. At the bottom of page 182 the textbook discusses if elastic (or inelastic) how an increase (or decrease) in price will affect revenue. So based on your determination of whether your product is elastic or inelastic then tell the reader whether increasing or decreasing price would benefit your firm and why. Maybe two or three paragraphs?