respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
One of the basic principles of economics is supply and demand. It is integral in how we consider the appropriate price for our product and how the change in price might influence the demand. We know intuitively that an increase in price will reduce demand, but by how much?
Keeping this in mind, please answer the following:
- Explain the concept of elasticity of demand. Discuss how the competitive environment influences elasticity of demand. Examples include the following
- Monopoly
- Oligopoly
- Monopolistic competition
- Perfect competition
- How would you, as a manager or leader, factor elasticity of demand into the decision-making process of raising prices with profit maximization in mind? Discuss an example.
