Eco 550 week 1

Apr 5th, 2015
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Strayer University
Course: ECO
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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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