What are some business examples that I can use? The objective of this assignment

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What are some business examples that I can use?

The objective of this assignment is to use the factors that affect the price elasticity of demand to determine if your product or service has an elastic or inelastic demand. In addition, use that information to determine how you should be changing your price.

Demand is defined as the relationship between the quantity demanded and the price of the good when all other influences on buying plans remain the same. When those influences don't remain the same demand changes. We depict that change by shifting the demand curve to the right (increase) or to the left (decrease.)

Pick a business that you know something about or can find information on. Describe the business and its main product or service.

For each of the factors that influence Demand listed below, describe how your main product or service (described in 1.) is affected.

2.1 Price of substitutes - What is a substitute for the product or service? Is the substitute's price increasing or decreasing? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

2.2 Price of complements - What is a complement for the product or service? Is the complement's price increasing or decreasing? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

2.3 Consumer Income - Is consumer income increasing or decreasing? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

2.4 Consumer tastes & preferences - How are consumer preferences changing? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

2.5 Consumer expectations of income - Do consumers expect their incomes to increase or decrease? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

2.6 Consumer expectations of price (of your product or service.) - Looking ahead, do consumers expect the price of your product or service to increase or decrease? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

2.7 Demographics - Number of Consumers (Buyers) - Is the number of buyers increasing or decreasing? How does this affect demand for your product or service and does it indicate that your demand is increasing or decreasing?

Based on your answers to 2.1 - 2.7, is the demand for your product or service increasing or decreasing? Why?

A note on retail businesses: Retailing is a service. Many people confuse the products the business sells with the retail service that they provide. If your business sells a lot of products which you don't manufacture, then you need to be looking at the retail service, not the product itself.

A note on what I'm looking for: Tell me what you think is happening in the marketplace, not just what could happen. For example, telling me that something is a substitute for your product or service is helpful. It is even more helpful to tell me that if the substitute's price increases that increases the demand for your product or service. However, you must tell me what is really happening - is the price of the substitute increasing or decreasing? If you don't know for sure give me your best guess.

Explanation / Answer

2.1) suppose the company of coco-cola cold drinks. the substitute of coco-cola drink is thumbs up cold drink..

suppose the price of thumbs up cold drink increases then it will increase the demand for coco-cola cold drinks which shift the demand curve of coco-cola rightward.

2.2) complement goods are those goods which are used together. the complement of coco-cola is bottle i.e coco-cola is kept in bottle and then sale to consumer. suppose the price of bottles increases then it will increase the price of coco-cola. now, due to increase in price of coco-cola the demand for coco-cola decreases which shift the demand curve of coco-cola leftward.

2.3) suppose the income of consumer increases which increases the purchasing power of consumer. so,consumer will demand more coco-cola which increases the demand for coco-cola and the demand curve of coco-cola shift rightward.

2.4) suppose the consumer preference changes. i.e the consumer likes more the taste of thumbs up, then it decreases the demand for coco-cola which shift the demand curve of coco-cola leftward.

2.5) suppose the consumer expect that the income will increase in future. so, they will demand more coco-cola which increases demand for coco-cola and shift the demand curve of coco-cola rightward.

2.6) suppose consumer expect that price will fall in future so they will demand less in current time period which decreases the demand for coco-cola and shift the demand curve leftward.

2.7) suppose the number of buyers increases then they will demand more coco-cola which increases the demand for coco-cola and shift the demand curve rightward.

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