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Eco 550 week 1

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Eco 550 week 1 1
Determine the Implications for each of the computed elasticities for the business in
terms of short term and long term pricing strategies. Provide rationale in which you cite
your results.
The practice of price strategies involves charging a relatively high price for a short time
where a new, innovative, or much-improved product is launched onto a market (Railey, 2012).
The objective with strategies is to introduce the low calorie microwavable food around the world
quickly in 26 markets in the month on April; prices are lowered later when demand from the
“early adopters” falls long term forecasting. The success of inelastic -.6107 price strategies is
largely dependent on the inelasticity of demand for the product either by the 26 supermarkets as
a whole, or by certain fourth month projecting. High prices can be enjoyed in the short term
where demand is relatively inelastic. In the short term the supplier benefits from ‘monopoly
profits’, but as profitability increases, competing suppliers are likely to be attracted to the market
(depending on the barriers to entry in the market) (px= price of leading competitors .3053
Inelastic) and the price will fall as competition increases. The main objective of employing a
price strategy is, therefore, to benefit from high short-term profits (due to the newness of the
product) and from effective market segmentation. Advertising also carry long term and short
term pricing challenges when external factors are associated with decision making. April
introduction of low-calorie approach is deemed within 26 market standpoints new product with a
great deal of apprehension because they have no precedent on which to base their decision. If
the new product’s price is excessively high, it is in danger of failing because of low sales volume
(Scarborough, 2005). However, if it is priced too low, the product’s sales revenue might not
cover costs. When pricing any new product, the owner should try to satisfy these objectives:
Maintaining market share as competition grows. If a new product is successful, competitors will

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Eco 550 week 1 2
enter the market, and the small company must work to expand or at least maintain its market
share. Continuously reappraising the product’s price at Advertising at 91.603 elastic in
conjunction with special advertising and promotion techniques helps to retain a satisfactory
market share. 91 percent increase allow earning profit should not introduce a new product at a
price below cost because it is much easier to lower a price than to increase it once the product is
on the market(Scarborough, 2005).
Recommend whether you believe that this firm should or should not cut its price to
increase its market share. Provide support for your recommendation.
The value of low calorie microwave food that gather research information from
competitors offerings, has seclude information on whether the market has been exposed to many
other similar offerings. The 26 supermarkets sales figures are readily available, total market sales
are more difficult to determine. Usually, this information is available from trade associations and
market research firms (“Economics”). Market share often is associated with profitability and thus
many firms seek to increase their sales relative to competitors. Px= Price of leading competitors
product are inelastic at a steady paced at a .3053 Here are some specific reasons that a firm may
seek to increase its market share higher volume can be instrumental in developing a cost
advantage. Price forecasted to -.6107 the low calorie microwaveable brand can afford to offering
massive product at a reasonable introductory price and then determine the demand and supply
patterns of consumers, and can examine progress in a later date. To conclude recommendation
low price in an introduction stage can determine your long term success with forecasting results,
your target customers and in progressing times the increase of supply if demand reflects.

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Determine the Implications for each of the computed elasticities for the business in terms of short term and long term pricing strategies. Provide rationale in which you cite your results. The practice of price strategies involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a market (Railey, 2012). The objective with strategies is to introduce the low calorie microwavable food around the world quickly in 26 markets in the month on April; prices are lowered later when demand from the "early adopters" falls long term forecasting. The success of inelastic -.6107 price strategies is largely dependent on the inelasticity of demand for the product either by the 26 supermarkets as a whole, or by certain fourth month projecting. High prices can be enjoyed in the short term where demand is relatively inelastic. In the short term the supplier benefits from 'monopoly profits', but as profitability increases, competing suppliers are likely to be attracted to the market (depending on the barriers to entry in the market) (px= price of leading competitors .3053 Inelastic) and the price will fall as competition increases. The main objective of employing a price strategy is, therefore, to benefit from high short-term profits (due to the newness of the product) and from effective market segmentation. Advertising also carry long term and short term pricing challenges when external factors are associated with decision maki ...
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