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Economics
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University of Birmingham
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ECON 340
ASSIGNMENT-2
First Semester, 2021-2022
Total marks: 10 marks (Chapters 3, and 4)
Student name:
ID.
Section No:
E-mail:
Please read these instructions BEFORE answering the assignment.
Instructions:
1- After answering the assignment, you should save it as a PDF file and upload on BB
2- You should submit the assignment BEFORE December-04, 2021, @ 11:59 PM. After this date it
will not accepted and not graded.
3- Write answer from your own understanding, copy & paste answer will not be acceptable.
Question 1 : (2 marks)
Write Notes on bellow:
A. Market research
It is necessary to conduct market research in order to gather feedback and make well-informed
decisions about the target audience when evaluating the viability of a product on the market.
Customer satisfaction, reduced customer churn, and increased profitability can all be achieved
through market research. It is possible to conduct primary and secondary market research (Fisher
& Kordupleski, 2019).
Primary market research is a method in which organizations or businesses contact or hire
a third party to conduct relevant studies to collect data.
Secondary market research: makes informed decisions using data that is organized by
outside source like government agencies, commercial sources, newspapers and many
more.

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B. Cross elasticity of demand
Cross elasticity of demand examines the relationship between two products when one of them is
affected by a price change in the other. It shows how the price of one product affects the demand
for another.
Cross elasticity of demand can be divided into three distinct categories:
Cross Price Elasticity is positive if the formula returns a value greater than 0.001. Thus,
the demand for product Y rises when the price of product X increases.
When the formula returns a value less than zero, it is considered to have a negative cross
price elasticity.
Finally, Cross Price Elasticity that has nothing to do with the formula yields a result of 0.
There is no effect on demand for product Y even if the price of product X rises by 100%.
Question 2: (4 marks)
Discuss the price elasticity of demand and what are the factors affecting the demand
elasticity, explain in detail.
In general, elasticity is a measure of how quickly one economic variable adjusts to a shift in
another. When the price changes, the quantity people are willing to buy drops (Pupavac et al.,
2020). This is known as price elasticity of demand. Because of the law of supply and demand, it
is calculated as the percentage change in quantity demanded over the percentage change in price.
Elasticity of demand is influenced by many factors. These are a few examples:
Nature of commodity: This means that if the commodity is essential, its demand will be
inelastic, even if the cost rises, because even if it does, the demand will not change. In

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ECON 340 ASSIGNMENT-2 First Semester, 2021-2022 Total marks: 10 marks (Chapters 3, and 4) Student name: ID. Section No: E-mail: Please read these instructions BEFORE answering the assignment. Instructions: 1- After answering the assignment, you should save it as a PDF file and upload on BB 2- You should submit the assignment BEFORE December-04, 2021, @ 11:59 PM. After this date it will not accepted and not graded. 3- Write answer from your own understanding, copy & paste answer will not be acceptable. Question 1 : (2 marks) Write Notes on bellow: A. Market research It is necessary to conduct market research in order to gather feedback and make well-informed decisions about the target audience when evaluating the viability of a product on the market. Customer satisfaction, reduced customer churn, and increased profitability can all be achieved through market research. It is possible to conduct primary and secondary market research (Fisher & Kordupleski, 2019). • Primary market research is a method in which organizations or businesses contact or hire a third party to conduct relevant studies to collect data. • Secondary market research: makes informed decisions using data that is organized by outside source like government agencies, commercial sources, newspapers and many more. B. Cross elasticity of demand Cross elasticity of demand examines the relationship between two products when one of them is affected by a price change in the other. It shows how the price of ...
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