Demand Analysis of low-calorie microwavable food Essay
From the above results, you observe that the individual price flexibility is – 0. sixty one. Thus the necessity for the low-calorie microwavable food is usually inelastic in nature.
This implies that an embrace the price of the meals leads to the fall of the quantity demanded by less than proportionate quantity. Income suppleness of the very good calculated is usually 0. 38. This implies the good picked is normal very good. The mix price flexibility is zero.
34. Hence the two items are nearly substitute merchandise. Finally, visiting the advertisement elasticity, we can see the advertisement suppleness is 0. 73. Thus advertisement has a important impact on the revenue of the product. Since value elasticity is no more than 1, total revenue can fall if price is catagorized.
Moreover the cross price elasticity from the product is nearly close to actually zero. So , in case the firm will not lower the price to increase its market share. i) The demand curve s i9000 drawn below: ii) By these prices you can an excess supply. Thus market forces are unable to determine the equilibrium.
Increase in advertisement spending can improve the demand this will likely shift the need curve rightward. Similarly virtually any reduction in advertisement expenditure can shift the demand curve leftward. Similarly, a rise in per capita salary will change the demand shape rightward and viceversa. At this point, the supply curve can change rightward when there is any improvement in the technology.
On the other hand any kind of supply surprise can switch the supply competition leftward.