Chapters 3 & 4
Economics for Managers, 3rd Edition
By: Paul G. Farnham
This week we will be discussing demand elasticity and the impact of consumer behavior on demand.
Demand elasticity is actually a quantitative measurement designed to show percentage changes in quantity demands by consumers. Elasticity is measured in terms of product prices, consumer income, prices of other goods and services, and several other variables. Elasticity, then, is a measure of the responsiveness to the changes in these variables.
Select a product that is marketed in the U.S. that has shown significant movements in consumer demand elasticity. Identify the reasons for the movements and explain how the elasticity has affected managements ability to control pricing.
Economists and management use data from market research and consumers to analyze the economic factors that influence demand for different products. In an effort to understand consumer behavior and demand companies use one or more non-statistical methods:
3.test marketing and price experiments;
4.analysis of census and historical data; and
For the second part of this weeks discussion complete the following task
Select one of the five non-statistical methods, briefly define the method, explain the value in analyzing consumer behavior and demand, and then provide an actual example.