Elasticity :: Economics, Price

introElasticity is one of the most important theories in economics and it is a measure of responsiveness (Baker, 2006)i. There are mainly two types of picnic, the catch of exact which includes value elasticity of demand, income elasticity of demand, and frustrate elasticity of demand as well as elasticity of supply (McConnell, Brue, & Flynn, 2009)ii. The degree to which a demand or supply curve reacts to a change in expenditure is the curves elasticity (Lingham, 2009)iii. Elasticity varies among products because some products may be to a greater extent than essential to the consumer. ConsumerPrice elasticity plays an important role in the lives of consumers. The price elasticity of demand is the sensitivity of the demand for a product when its price changes (McConnell, Brue, & Flynn, 2009)iv. Cafes like Panera Bread refuses payments from customers and politely asked them instead to take what you need, and leave your bonnie share (Strom & Gay, 2010)v, resulting in more people reduceting goods like diet at a fair price that they are al first foring to pay. establish on the income elasticity of demand, consumers can get a better and fitter life as they will buy things with better quality as their income rises. People will go to Italiannies for pizza and not to Pizza army hut as Italiannies offers a better, tastier, healthier and wider variety of choices, even when it is more expensive. With cross elasticity of demand, consumers can get the same quality product at a cheaper price as the competition between substitute goods will result in price reduction or improved quality. Consumers get to travel by MAS Airlines at a cheaper price as the rivalry between MAS and other airline companies has caused its price reduction (Gunasegaran, 2011)vi. Consumers with a low budget can also buy what they need. Consumers can get more value from a package offer when buying complementary goods as they go together, for example McDonalds McValue Lunch which comprises of a burger, fries, and soft drink, both for only RM5.95 onwards (My Food Fetish, 2009)vii. With this, consumers can get convenience when buying certain products. BusinessElasticity is also prominent to businesses. The price elasticity of demand is very important for companies to determine the price of their products and their total gross revenue and revenue. Newell showed that by cutting the price of the Left 4 Dead plunk for in half to $25 during a Valve promotion, its sales increased by 3000 percent (Irwin, 2009)viii.