Carlos Cruz Elasticity Scenario Analysis
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- Category: Politics: Economics
- Date Submitted: 11/15/2011 03:58 PM
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Carlos Cruz Elasticity Scenario Analysis
ECO/561
Carlos Cruz Elasticity Scenario Analysis
This paper analyzes the development of a product, supply and demand which has the same evaluating all angles from the viewpoint of an economist with the decision to start a business. Carlos Cruz is an inventor who is trying to create a new product that uses technology to make printed words such as books, materials and convert text into a digital product that people can hear (University Of Phoenix, 2011). This has options or alternatives to their rates in line with the cost of doing business. Carlos must make the important decision whether to incur the costs generated by labor and other labor costs can have the effect of increasing the cost and value of your product or not. The total price of the final product will increase revenues and decrease Carlos by product. Carlos is facing some critical decisions about his invention. He believes he has a viable business, but is not sure how to achieve the maximum total revenue. Carlos has found that some economic principles are present and should not be ignored when launching its product to consumers. Following are some of them.
One principle that is present is the concept of supply and demand. The demand is defined as the quantity of a product that consumers are willing and able to buy based on price over a period of time (McConnell and Brue 2008). The demand shows a relationship if all other things being equal, the higher the price of a good, less people will demand good. Therefore there is a negative relationship between price and quantity demanded. In other words as the price increases, quantity demanded decreases because people do not want to pay the higher price and finds alternatives and substitutes it more later. The determinants of demand affect the purchase are: consumer preferences, the number of consumers in the market, consumer income, price of related goods and consumer expectations about future prices. The...
ECO/561
Carlos Cruz Elasticity Scenario Analysis
This paper analyzes the development of a product, supply and demand which has the same evaluating all angles from the viewpoint of an economist with the decision to start a business. Carlos Cruz is an inventor who is trying to create a new product that uses technology to make printed words such as books, materials and convert text into a digital product that people can hear (University Of Phoenix, 2011). This has options or alternatives to their rates in line with the cost of doing business. Carlos must make the important decision whether to incur the costs generated by labor and other labor costs can have the effect of increasing the cost and value of your product or not. The total price of the final product will increase revenues and decrease Carlos by product. Carlos is facing some critical decisions about his invention. He believes he has a viable business, but is not sure how to achieve the maximum total revenue. Carlos has found that some economic principles are present and should not be ignored when launching its product to consumers. Following are some of them.
One principle that is present is the concept of supply and demand. The demand is defined as the quantity of a product that consumers are willing and able to buy based on price over a period of time (McConnell and Brue 2008). The demand shows a relationship if all other things being equal, the higher the price of a good, less people will demand good. Therefore there is a negative relationship between price and quantity demanded. In other words as the price increases, quantity demanded decreases because people do not want to pay the higher price and finds alternatives and substitutes it more later. The determinants of demand affect the purchase are: consumer preferences, the number of consumers in the market, consumer income, price of related goods and consumer expectations about future prices. The...