Price Elasticity Of Demand - Assignment

Added on - Feb 2020

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GO NUTS INTERNATIONAL
Table of ContentsQuestion 1...............................................................................................................................1Question 2...............................................................................................................................3Question 3...............................................................................................................................5Question 4...............................................................................................................................5
Question 1ParticularsYear 1year2Sales400350price2.53% change in sales12.5% change in price20Price elasticity of demand0.625InterpretationsIn the above table the price elasticity of demand is less than one that means it is regarded asinelastic demand in the market. It plays vital role in determining the price of the products inenterprise as inelastic demand the company can earn price by increasing the price of product.That is3.0 pricewill be selected for this situations in Go Nuts international enterprise.ParticularsYear 2Year 3Sales350280price33.5% change in sales20% change in price16.67Price elasticity of demand1.199760048InterpretationsThis type of situations is regarded as elastic demand as the price elasticity of quantitydemand is greater than 1. In price elasticity situation the prices will be decreases in order to earnhigher revenue as most of the buyers in these situations are price sensitive. The price to be takenin these situations is3.0in the above given situations.1
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