Short Discussion 1:
A) Name one good where your price elasticity of demand is greater than one (that is, your demand is elastic). If you were the manager of the company that sells this good, what considerations would you make before changing the price?
B) Name two goods where your cross-price elasticity of demand is greater than one (that is, your demand is elastic for Good A when the price of Good B changes).
What would you do if you were the manager of the company that sells Good A?
C) Name one good where your income elasticity of demand is greater than one (that is, when your income changes, your demand is elastic). What would you do if you were the manager of the company that sells this good?
Short Discussion 2:
A) Why do you think the stores wouldn't raise prices to increase revenue in this case?
B) Why would the stores wage price wars in a declining economy?
C) Do you think cost cutting is a good strategy during a recession? Why or why not?
Short Discussion 3:
A) Haven't there always been "knowledge" workers, people who do more than what a robot could do? Why, then, has such a big deal been made of the "knowledge economy" and the "knowledge worker" in recent years?
B) According to some management experts, mechanisms will have to be created for harnessing the wisdom of crowds. Change, innovation, and adaptability are crucial. How might markets inside the firm answer these challenges?